Business Owners Must Set Up Living Trusts
Many business owners are so busy running their business or franchise, they sometimes forget some of the things involved in personal matters that now impact the business. Planning ahead and seeking legal counsel for this will give you an big picture view of some things you should consider preparing now that you are a business owner.
One of those is setting up a living trust to ensure the administration of your estate is now part of the transition of your business. In case of an emergency or if something should happen to you that you cannot make decisions for your business that depends on you for daily operations and finances, you must establish a living trust.
It's better to get all the administrative issues spelled out in a legal document before an urgent matter strikes. In this document, you can provide advanced directives and a living will so you can designate who should make decisions for you in the time when you are unable to make decisions for you and your business.
Many things must be considered not only who is designated to speak for you on issues of medical care but also when issues of mental illness arise. These may not be life and death situations but times when serious consideration must be given to the options available. Spelling out exactly the types of treatment you prefer in a variety of situations will be the best way to ensure your wishes are carried out. It is a legal professional who can outline the various situations that could arise and ask for how you would like that situation to be handled.
In the event of an emergency or long term care issues, the successor trustee is the person to whom you designate all decision making. You should make sure you speak with this person prior to naming them in the living trust so that they are clear on your intentions of naming them legally and how they are to manage the affairs of your trust. You may have significant assets that need protected, invested or managed. Directing them on how to carry out your plan for these assets will be critical and the more detailed you can be, the more likely they can carry out the intent of your will and trust.
In addition to naming a trustee, you'll also want to designate beneficiaries and be specific about their full legal name to ensure there is no confusion nor unscrupulous person who tries to petition to argue that they were the designated beneficiary.
This is where sound legal counsel is advised to ensure that you draft a secure, legally binding, and legally clear trust to avoid any confusion or disputes. You want to make sure that the assets you pass on upon death are assigned to those who are supposed to receive them.
A residual clause in the trust will direct the trustee on how to disburse what remains of the assets after taxes, fees and any outstanding debts have been paid. Beneficiaries maybe living relatives, friends or maybe entities such as charities or an endowment or scholarship program you want to initiate in your name. If there are multiple beneficiaries, you want to be clear on the disbursement of funds and assets so there are no disputes or any beneficiaries feels they were not treated according to the terms of the trust and takes up valuable resources contesting the trust. Administrative fees, court costs, legal fees all will be paid for from the estate so you want to make sure the language used in the trust is legally sound which is why you want a law firm with experience establishing trusts to assist with the drafting and review of the final trust document.
If you already have a trust or will and you ever decide to make changes, you'll want to have legal counsel advise and review the changes you want to make to ensure its legal soundness. It is a simple procedure to add an amendment to a trust or will but you want to make sure it is done correctly without entangling any legal concerns.