I hope you are enjoying your summer! Those of you who have called or come into the office have met Alice Adams, our new assistant, who is staffing our never-dull front office area. Alice joins our family and immigration attorney, Anne Leete; our estate planning Client Services Director, Karissa Baker; our Funding Coordinator, Bari Vallas; and me, along with whoever’s children happen to be running around that day.
We also had a summer intern from Columbia (the school not the country), who managed to make it into the office before noon several times over the course of his tenure with us. After he left, we found his checkbook on his desk, so we are planning to shut down the office for a few days and take a much-needed vacation on Tommy the Intern.
Ok, we probably will just mail it to him.
My family and I did get to take our first *real* vacation together (not funded by Tommy). We had a California extravaganza–Disneyland, Legoland, San Diego Zoo and Wild Animal Park. It was fantastic!
As you know, there are a lot of small businesses here on Maui, and we’ve been getting questions about why business owners would put their business in a trust. Read on…
Estate Planning and Business Succession
What do businesses and people have in common? Business entities, like people, have their own legal existence. That just means that business entities can enter contracts, buy and sell goods, sue and be sued, and do just about anything else that a person can do.
The similarities end, however, when the discussion turns to continuity. A business entity, unlike a person, can exist perpetually. Sure, businesses can be wound up and their existence terminated, but they can and often do outlive their founders–at least, that’s the hope of many business owners.
The Living Trust Solution
Without a plan in place for what will happen in the event of death, all assets owned by individuals, whether businesses, cash, stocks, or real estate, may become subject to the court system. In the case of assets like cash, being subjected to probate simply means that attorney fees will eat up part of the estate.
In the case of a business, the probate process can very well mean a total loss. That’s because probate takes a long time, and if there is no succession plan in place, then a business may not be able to operate lawfully and may have to be wound up.
It goes without saying that if you own a profitable business, you want to pass it along to those who matter most in your life. A living trust is a great mechanism for people–business owners and non-business owners alike–to pass on their assets without involving the court system, at a significant cost savings, and with a high degree of privacy.
In the case of business owners, there are some specific benefits to using a living trust:
-The ability to pass ownership of your business without the need for court involvement, so that operations never skip a beat.
-The ability to specify a succession plan in accordance with your business’s governing documents (e.g. operating agreement or partnership agreement).
Tailoring living trusts is a big part of our legal practice. We are here to serve your needs and provide a customized solution to your estate and succession planning needs, so that you never have to worry about what will happen to your loved ones, your assets, or your business in a worst case scenario.