4 Reasons Why Every Business Needs a Probate Plan

A successful business is a testament to the careful planning of the person at the helm. It means that while you can make all plans for the success of your business, from marketing strategies to increasing revenue and even a succession plan, one of the key plans that need to be in place is an estate plan for a business because it can ensure your business won’t have to go through the challenging process of a probate court case upon your passing away. Life is unpredictable, and in the event of a tragedy such as death, the people you leave behind might struggle to claim your inheritance smoothly. Read on to find out four reasons why you need such a contingency plan. 

To Keep The Business Afloat

First and foremost, you have obviously poured your blood and sweat into the business, and it won’t be ideal to leave its future hanging in the event of your death. In the event of the death of a business owner, if they haven’t set up a business plan, it can put the company’s functionality into jeopardy. Often, it is the primary source of income for the deceased’s family and all the employees of a company, in which case it can be difficult for them to sustain while the company’s future hangs by a thread. You should ideally create an estate plan that outlines the operational aspects of your business so the company keeps running smoothly even in your absence and the income of your family, beneficiaries, and employees keeps coming in smoothly. 

To Keep the Wealth Intact

Another important reason you need a probate plan set up as a contingency is to protect all the wealth you might have accumulated since starting the business. In the absence of a solid will, all of your business assets will have to go through the probate court process, which means unnecessary delays and possible predatory attacks from creditors and other predators trying to get a piece of your wealth. It also leaves your family susceptible to danger because when a property goes through the probate court process, the information about the probate case becomes public knowledge, revealing the true extent of your wealth to the general public. If your wealth is not sensibly distributed, people might try to extort it from the beneficiaries in parallel court proceedings, for instance, getting a heavier alimony than they would have sued for in the first place just because there is potential for your child to receive your wealth. 

To Prevent Being on Mercy of State Laws

If you haven’t planned out what will happen to your business in case of your death, not only will the business go through a probate court process it will also be entirely subject to the laws of the state your business is registered in, and it could have serious ramifications. For instance, if you are the sole owner of your business, in the event of your passing away, depending on your state, and if your company is a Limited Liability Company (LLC), the state would require you to dissolve your company. Similarly, if you’re in a state that allows the owner’s economic rights to pass over to their family members who may or may not have decision-making acumen, in which case not only will they be burdened with responsibilities, but your business will be in jeopardy as well. The only possible way of avoiding this outcome is by properly planning your estate. 

To Help with Decision-Making Process

Losing a loved one can be a terrible thing to go through; on top of that, if the family left behind has to deal with business decisions, it can cause a lot of stress. If you’ve put work into bringing a business to life, it would be ideal not to let it suffer because you didn’t set up a contingency plan. Create an estate plan that outlines how you would like your company to be run, what the business mission looks like, who should assume the decision-maker role, what your employees can expect in terms of the business’s future, etc., if you’re struggling to figure out how to go about this, consider getting in touch with a reputable firm like Keystone Law Group to get solid advice on the subject.

Conclusion

Taking these reasons into account, you will have sufficient motivation to put work into setting up an estate plan that can protect your business, your family, and your employees. In a nutshell, all the people that you care about and your legacy can be safeguarded by simply putting an estate plan into place with the help of your lawyer.