If an individual in Florida does not have a will, decisions about how assets are distributed will be made by the court. In some instances, the results are pretty much in line with what a recently departed loved one may have wanted. But this isn’t always the case. Heirs sometimes end up in long, drawn-out legal battles that can take an emotional and financial toll on everyone involved. For small business owners, not having a will can be especially problematic.
Should a small business owner fail to cross estate planning off their to-do list before passing, all assets and property related to their business will end up in probate. This may result in a loss of income for family members, or the business may cease to operate altogether, especially if legal fees eat away at profits. Even if it’s mutually agreed that the business should be sold, it could take a year or more for relevant parties to get the proceeds.
A will can create a clear path for the transfer for business-related assets and property. It can also be helpful for business owners to provide a detailed list of all banking and financial accounts along with access to important files. This information is sometimes given to the person who will be responsible for the distribution of assets (executor), or someone else named in the will. With a succession plan, a small business owner can specify what will happen to the business and who will assume various roles and duties. It’s also possible to stipulate that the business will be sold upon the death of its owner.
An estate planning attorney might also help a client who is part owner of a business create a buy-share agreement that dictates what will happen with vacant shares or who may buy their half of the business. For additional peace of mind, some clients prefer to have a lawyer draw up a power of attorney that states who will make important business decisions should a business owner be unable to do so.