How COVID-19 Has Brought The Value Of Trusts In Business Planning Into Focus

value of trusts business planning and COVID

While the pandemic has wreaked havoc on the lives of millions, disrupted the lives of everyone and virtually crippled the world economy, it has also been responsible for bringing some very important things to light. One is the importance of having a legal will in place no matter how young or old you may be, and better yet, a well thought out estate and asset protection plan. And secondly is the importance trusts play in business planning.

I’m sorry that these important topics came to the foreground in such an unexpected and heartbreaking way. But the fact is that as a result, many more people will hopefully take action and be better prepared for other unforeseen events moving forward.

My focus here is on the value of business trusts, especially for small businesses. As has happened time and again during this pandemic, some small business owners contracted COVID-19 and were rendered unable to run their businesses. In some cases, the business owners passed away. In most cases where death happened unexpectedly the business was not legally prepared to have anyone else step in and keep the business going. In these circumstances, it is also likely that assets were not protected. And if your business is not in a trust, then creditors can come after any and all personal assets.

Every business owner needs to have a succession plan in place from the beginning and that would be planned for in a trust. There are different kinds of trusts for business. A living trust is for personal or business assets and is in place while you are still alive. Should something unexpected happen where you become unable to tend to your affairs, your family is able to continue running the business, or in the case of personal assets, are able to manage your assets for you.

Upon your death, the assets in the trust go directly to the beneficiary, allowing the business to continue after your death should the family member choose to keep running the business. Even if your estate does need to go through probate, the assets contained within the living trust will be disbursed much quicker than assets that are not in the trust. The living trust also reduces the tax burden on your estate. The estate will still have to pay federal taxes, but it minimizes any state inheritance taxes.

As the pandemic has shown us, we never know what might happen. Having a business trust in place will designate successors to your business and protect your assets while providing for your family. To discuss establishing a trust for your business and/or personal estate and asset protection plans, give us a call.

Looking to find an experienced estate lawyer in the Georgia area who is skilled in asset protection and estate plan preparation? Shannon Pawley is an attorney in Georgia with expertise in estate planning and asset protection. Shannon can provide assistance with creating an estate plan to include making a will and how to establish a trust properly. If you have questions about asset protection or questions about making an estate plan, reach out to Shannon and she will be glad to help answer all the estate planning questions you might have!

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