Let’s face it creating a will and implementing trusts for when we are no longer around is not at the top of most people’s priority list. It’s just not something we like to think about. However, protecting our loved ones and making sure they are taken care of is a top priority. Going through the process of drafting a will now will ensure that your wishes about how to distribute your assets and personal possessions are acknowledged and adhered to.
Don’t leave the decisions to a court. At Walsh Banks Law we can help you make wise strategic decisions on developing an estate plan regarding both personal assets and your business. Many strategies exist within estate law to ensure that a business owner’s personal and business assets are transferred smoothly when the time comes – all while minimizing estate taxes and business transfer taxes. We can help you through each step of the process. At Walsh Banks Law we can help you:
When a business succession plan is in place, it can greatly help a business transition itself after the death of the business owner. A business succession plan will often identify:
Essentially, a good business succession plan leaves no doubt as to who owns the business, who’s in charge of day-to-day operations, and what everyone’s responsibilities are.
Simply put a will is an estate planning document. It outlines what you would like to do with the assets within your estate. It also allows you to name someone you trust to execute your wishes; known as the executor. Your will also provide you with an opportunity to say who you would like to be the guardian of any minor children.
After a person dies their estate is settled through the probate process. Within this process any outstanding debts are paid. If the court determines that there is a “valid” will the remainder of the estate is then distributed based on the terms laid out in their will.
If you don’t have a will, or if the will is declared invalid by the probate judge, the balance of the estate will be distributed based on Florida law and not how you may have intended.
If you are a business owner and you do not have a will, ownership of your company could be passed to a family member that has no idea of how to manage the business. Without a will the courts will appoint an executor of your estate. The court appointed executor may not be someone you know or trust. Their decisions will affect how your company, its assets and its debts are dealt with. With a will you will be able to name an executor you know and trust.
If you have partners in your business, you should strongly consider developing a sound succession plan that includes a buy-sell agreement. Otherwise, if a business partner passes away you could get stuck with unintended business partners that, frankly, you don’t want to be in business with.
Although a will is important, they do have a few drawbacks. The first and biggest drawback is that any property passed on through a will must go through the probate process; and taxes must be paid. Second, you cannot control how the assets are distributed. With a will they are distributed all at once.
Used correctly trusts are powerful tools that help you protect and preserve your assets. Whereas a will is a legal document that provides instructions on what to do with your assets after your death, a trust is a legal entity that holds those assets. When you create a trust you are called the “grantor” because when you fund a trust you are granting ownership of those assets to the trust. The trust is administered by a trustee on the behalf of a beneficiary.
Any assets that have been granted to the Trust technically no longer belong to you but the Trust. Therefore when you pass away those assets bypass the probate process.
Most trusts are setup for the sole purpose of avoiding the probate process, and are sometimes used instead of a will. However, Florida trusts can be used to manage and distribute assets during life as well.
Trusts are more complicated to setup. And, due to management fees associated with many types of trusts; they are also more expensive as well. However, Trusts allow for more flexibility. Assets distributed through a Will are done all at once. One time distributions are not always desirable. So for instance, although you may want to provide for the financial wellbeing of a minor child, family member, or even a friend, but they don’t have the financial acuity to manage a large financial distribution over a long period of time.
Learn more about Florida Trusts and how we can help you.
Wills and Trusts have very similar purposes. They both help you, the benefactor; manage the distribution of wealth to beneficiaries. However, they accomplish their purposes in very different ways. A well-constructed estate plan can leverage those differences for maximum asset protection and control of how and when those assets are distributed.
Everyone should have a will. It’s the only way for you to communicate what you would like done with the assets you’ve worked so hard to build. Depending on your situation setting up a trust, or several different trusts for specific purposes, may also be strategically important, or in some cases necessary. Wills and trusts are the foundation stones of good estate planning.