If you are the owner of your own business, it is important that you talk with a Michigan trust attorney so you can protect your company and help to ensure that the business can survive beyond your life. Your company should be able to serve as a strong legacy you leave for the people you love, but the continuation of the business could be in jeopardy if you do not make a succession plan to allow for its fast and effective transfer if something happens to you. The use of a trust could be a part of the succession plan that you create for your organization.
Biddinger & Estelle can assist company owners with finding the best ways to transfer their business on to the next generation. Our legal team can also provide guidance to anyone who wants to learn how trusts could protect their wealth and make the transfer of their assets easier.
Give us a call today to talk with a Michigan trust attorney and learn more about the assistance that we can offer. Our legal team will explain exactly what benefits trust creation could have for protecting your business or other assets. If you own a company, you can also read on below to find out how creating a trust could potentially help maximize the chances of your company being able to survive for a long time after you are gone.
Trusts can Ensure that Assets Transfer Quickly
A business cannot exist for a long time in limbo with ownership uncertain and with no clear idea of who is making decisions. Unfortunately, this is often what happens when the person who opened the business or when the primary person who operates the business passes away or becomes incapacitated. The probate process can take a long time if company assets and ownership must pass during probate and the process of the court appointing a guardian can take a long time if the company owner becomes incapacitated without an incapacity plan in place.
When a trust is created, assets can transfer much more quickly through a process called trust administration than the transfer that would take place during the probate process. This ensures a new company owner can take over right away.
A backup trustee chosen by the trust creator – the business owner – can also be granted immediate authority in an incapacity plan to take over managing business assets if the company owner becomes incapacitated due to illness or injury.
Trusts Can Allow you to Protect Assets from Loss
Business owners are often vulnerable to creditor claims or lawsuits against the company. Depending upon how your business is structured, a claim against the business could result in your personal wealth being in jeopardy. It is possible you could use trusts to protect some of your personal assets by putting them beyond the reach of creditors through the creation of specific types of trusts. However, there are usually other solutions – like incorporation – that would be better for achieving this goal.
Trusts can, however, be helpful for the protection of business assets. If you don’t want ownership shares of the company to fall into the wrong hands, you can create a trust which will give you much more control over who inherits and how assets are managed.
Instead of just leaving business assets or an ownership stake in a company to someone in your will, which would lead to a free-and-clear transfer in most circumstances with no conditions, you could create a trust document that allows you to ensure that the person who inherits does not behave irresponsibly with an inheritance or lose that inheritance in divorce.
Many business owners also face a loss due to estate tax. When business assets count for purposes of determining if estate tax is assessed, it becomes more likely you’ll hit the allowable exemption limit below which no estate tax is charged. If you are above this limit and pass assets on to anyone other than a spouse, the government is going to take a big chunk of your wealth. Some types of trusts can make it possible to avoid this outcome.
Getting Help from A Michigan Trust Attorney
Biddinger & Estelle can provide invaluable help with the process of creating a trust, whether your goal is to protect your business or any other assets that matter to you. Give us a call at (989) 872-5601 or contact us online to find out more about the ways in which a Michigan trust attorney can assist you with keeping your company safe and otherwise protecting your wealth.