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A person’s estate plan has the capacity to contain critical information about what should be done with a person’s estate after his or her death. In nearly every situation, it is critical that a person begins estate planning as soon as possible because it is impossible to determine when catastrophe will strike or death will occur. For business owners, this type of planning is even more important because a significant amount of many business owners’ wealth is directly connected to their companies. As a result, the strength and nature of a business owner’s estate plan dictates how that business will be transitioned between generations and either cause a great deal of money to be lost or gained based on how the transfer occurs. This article will discuss some of the particular advantages that estate planning tools offer for business owners.
Advantage #1: Estate Tax Reduction
An estate tax is a tax that is placed on the estate of a deceased individual. These taxes can represent a large amount, and in some cases can cost up to 50% of a business’s value. Various elements of the Internal Revenue Service’s codes, however, allow individuals to use probate tools to minimize the amount of tax that is placed on an estate. As a result, proper estate planning allows business owners to reduce the amount of taxes that are owed to the state and federal government upon their passing.
Advantage #2: Succession Plans
If a business is a sole proprietorship, a business owner requires a plan so that heirs are informed about how to operate the business once the owner has passed away. There are various methods and estate tools for a business owner to describe how the business should be operated after his or her death. Even though estate planning tools can be helpful in determining a succession plan, it is also often a wise idea for a business owner to discuss how the business should be run after his or her death with the business owner’s heirs.
Advantage # 3: Avoid Probate
Living trusts are similar to corporations in the sense that both are entities that exist apart from individuals. When assets are placed in a trust, there is nothing to probate when a business owner dies. In addition to avoiding the probate process, living trusts offer several unique advantages including transferring assets immediately after an individual’s death and reducing estate taxes.
Speak with a Knowledgeable Oklahoma Probate Attorney
The probate process is complicated and often requires an individual to make several important decisions. Because probate tools are important for achieving one’s wishes, many individuals choose to use an attorney to create the strongest probate devices possible. Since 1982, attorney Jim A. Lyon has helped individuals in the Oklahoma City area create probate tools that accurately reflect their wishes. If you require the assistance of a knowledgeable probate attorney, consider contacting attorney Jim A. Lyon. The law offices of Attorney Jim Lyon can be contacted by calling (405) 843 – 0461 or completing the firm’s quick and convenient online form.
