Business owners in California will benefit greatly by engaging in estate planning and developing various beneficial features and protections. The legal instruments that are created can ease the stress and potential complications that family members may encounter upon the owner's death. In addition, a buy-sell agreement can be formulated during the estate planning process.
This agreement will set the terms of succession of the business between employees, partners and family members in advance of the person's death. Life insurance may be purchased to fund post-death transfers of ownership. The individual will also have a will as the central focus of the plan, although in some situations a living trust will be the more central legal instrument and the will, if any, in that event may serve a more minor role.
With the living trust, probate can be avoided, providing the benefit of minimizing the delays and expenses that often apply to the post-death probate process. The trust may also serve to give the heirs protection from creditors, and in the event of incapacity the trustee can manage the financial assets for the owner. The business owner will get all the bases covered by making sure that the attorney, financial planning expert and the insurance agent are working together to coordinate all of the intended working pieces and desired outcomes.
There are several other legal tools that the business owner can utilize, including the health care directives and powers of attorney that are normally selected by most people who make an estate plan. A power of attorney gives the representative the ability to pay the bills and manages financial matters for the business owner. The power of attorney can prevent substantial expenses and excessive delays necessary to have a court-appointed guardian or conservator. The laws of California are the central framework that is followed in the estate planning process. It is vitally important to take advantage of all legal benefits and protections by having the professional assistance of an estate planning attorney.