If you're planning your estate and you own a business, you need to take steps to prevent probate problems. In most cases, the probate phase moves smoothly, without complications. However, issues with your estate can increase the risk that your loved ones will be faced with probate problems. This can be a real problem when you've left them a business to run. Here are four steps you can take to protect your family and your business.
Protect Essential Assets
When you pass away, your loved ones will need to continue daily business operations. However, they won't be able to do that if essential assets are tied up in probate. Unfortunately, mistakes during estate planning can throw everything into probate and lock away your assets. Luckily, there are some assets that can escape probate altogether. Those include bank accounts, life insurance policies, and real estate. It is important to note that you'll need to have specific beneficiaries listed for each of those assets.
Maintain an Updated Will
If your will hasn't been updated in several years and significant changes have occurred during that time, you need to meet with your attorney right away. Passing away with a will that is outdated is the quickest way to have your estate end up in a probate nightmare. This is particularly true if your current will is so outdated that people feel the need to contest the contents. To avoid issues with probate, update your will each time your business undergoes significant changes, including changes in partnerships or organizational structure.
Keep Your Important Documents Secure
Once you pass away, loved ones will need access to your important business documents. If you haven't secured them in one location, they may have a difficult time gathering the documentation they need. Unfortunately, that can put your business, and your loved ones, at risk. Now that you're preparing your estate plans, take this time to gather all your important business documents into one secure location. It's a good idea to make copies of your documents and put the originals in a safe deposit box.
Ensure Communication with Your Executor
If you have specific wishes for your business once you pass, it's important that you maintain communication with your chosen executor. They'll be ultimately responsible for overseeing your estate once you pass away. If conflict arises, such as one party wanting to contest your estate through probate, your executor will be better able to speak for you if they know your wishes in advance. It's also important that you put those wishes into writing. That way, there is no dispute once your estate enters probate.
Don't leave your business assets to chance. If you own a business, sit down with a probate attorney to plan your estate. Your attorney will help you avoid probate issues for your business and your loved ones.