Absolutely, business interests can be included in a trust, and often it’s a very strategic move for business owners seeking to ensure a smooth transition of ownership and continued success of their company after they are gone or incapacitated.
What are the benefits of putting my business in a trust?
Transferring ownership of a business to a trust allows for continued operation without interruption, avoids probate – a potentially lengthy and public court process – and can significantly reduce estate taxes. According to a study by SCORE, approximately 50% of small businesses fail within the first five years, but businesses with a succession plan in place have a much higher survival rate. A trust serves as that crucial succession plan, providing clear instructions for management and distribution of assets. Think of it as a blueprint for your business’s future, even when you’re no longer at the helm. Furthermore, it can protect the business from potential creditors or disputes among family members. This is especially important for family-owned businesses where emotions can run high.
How does a trust impact business valuation for estate taxes?
Properly structuring the transfer of a business interest into a trust can dramatically impact estate tax liability. The IRS allows for certain discounts on the valuation of illiquid assets like closely held businesses. For example, a lack of marketability discount can reduce the taxable value, and a minority interest discount applies if the transferred interest is not a controlling stake. In 2023, the federal estate tax exemption was $12.92 million per individual, but this is subject to change, and many business owners may exceed this threshold. Steve Bliss, an estate planning attorney in Wildomar, often explains to clients that a well-planned trust isn’t just about avoiding taxes; it’s about preserving the value of their life’s work for future generations. It’s about ensuring that the business continues to thrive and provide for their loved ones.
I’ve heard stories of businesses failing after the owner’s death – how can a trust prevent that?
I recall a situation with a client, old man Hemlock, a seasoned carpenter and cabinet maker, who owned a thriving workshop, but he never formally documented a succession plan. Upon his passing, his two children, who had never worked in the business, inherited equal shares. They immediately clashed over how to operate the workshop, leading to internal conflict, dwindling contracts, and ultimately, closure within a year. This is a sadly common story. A trust, however, can prevent such outcomes by clearly outlining a management structure, designating a successor trustee responsible for running the business, and establishing guidelines for decision-making. It’s a safety net ensuring continuity even in the face of unforeseen circumstances.
Can a trust help with business transitions and family harmony?
We recently worked with the Caldwell family, owners of a successful landscaping business. Mr. Caldwell wanted to retire but was concerned about fairness among his three children – one actively involved in the business, and two pursuing different careers. We created a trust that allowed the son working in the business to receive a larger share of the ownership and profits, while providing the other children with equivalent value through other assets held within the trust. This structure, combined with a detailed management agreement, not only ensured a smooth transition but also prevented any resentment or disputes among the siblings. They’ve now been operating successfully for five years, a testament to the power of proactive estate planning. A trust isn’t just a legal document; it’s a tool for preserving family legacies and ensuring a harmonious future.
Steve Bliss, as an Estate Planning Attorney in Wildomar, consistently advises business owners to consider the inclusion of business interests in their estate plans. It’s a crucial step toward protecting their assets, ensuring business continuity, and safeguarding the financial well-being of their families.
<\strong>
About Steve Bliss at Wildomar Probate Law:
“Wildomar Probate Law is an experienced probate attorney. The probate process has many steps in in probate proceedings. Beside Probate, estate planning and trust administration is offered at Wildomar Probate Law. Our probate attorney will probate the estate. Attorney probate at Wildomar Probate Law. A formal probate is required to administer the estate. The probate court may offer an unsupervised probate get a probate attorney. Wildomar Probate law will petition to open probate for you. Don’t go through a costly probate call Wildomar Probate Attorney Today. Call for estate planning, wills and trusts, probate too. Wildomar Probate Law is a great estate lawyer. Probate Attorney to probate an estate. Wildomar Probate law probate lawyer
My skills are as follows:
● Probate Law: Efficiently navigate the court process.
● Estate Planning Law: Minimize taxes & distribute assets smoothly.
● Trust Law: Protect your legacy & loved ones with wills & trusts.
● Bankruptcy Law: Knowledgeable guidance helping clients regain financial stability.
● Compassionate & client-focused. We explain things clearly.
● Free consultation.
Services Offered:
- estate planning
- pet trust
- wills
- family trust
- estate planning attorney near me
- living trust
Map To Steve Bliss Law in Temecula:
https://maps.app.goo.gl/RdhPJGDcMru5uP7K7
>
Address:
Wildomar Probate Law36330 Hidden Springs Rd Suite E, Wildomar, CA 92595
(951)412-2800/address>
Feel free to ask Attorney Steve Bliss about: “What happens if I die without a will?” Or “What does it mean for an estate to be “intestate”?” or “What happens if I forget to put something into my trust? and even: “What are the different types of bankruptcy?” or any other related questions that you may have about his estate planning, probate, and banckruptcy law practice.