Do you want the business you own to continue on after you pass away? If so, have you done the planning and executed the documents necessary to make that objective a reasonable possibility?
One way to have the business you own survive you is to enter into a document that provides for the sale of your interest to the entity or to the surviving owners of the entity. For more information on that approach, click on "internal sale."
If you want a family member to be the buyer, you need to consider taking steps to make them an active owner in the business before your death. This involves a special type of business mentoring that requires sensitivity to your relationship with the family member to be involved in active ownership, and any family members who will not be involved in active ownership.
Some estate planners recommend that a business owner place his or her interest in the business into a revocable trust to avoid having the business interest subject to probate. Probate is the name for a legal process where someone is given the authority by a court of law over the assets and liabilities of a deceased person. That person is then obligated to pay the creditors of the deceased and pay any inheritance or estate taxes due. If the business interest is transferred to a trust before the death of the owner, the business interest is not subject to probate upon the owner's death. According to the language in the trust and trust law, the deceased is merely replaced as beneficiary of the trust with one or more other people (i.e. secondary beneficiaries). The revocable trust is usually a fairly complex legal document that specifies in detail who will control and manage the trust (i.e. the "Trustee") both during and after the owner's life. It also provides for a "Successor Trustee" in case of the owner's inability to handle business matters because of mental or physical infirmity.
Other estate planners recommend that a business owner specify in his or her will who is to receive the owner's interest in the business, and handle the issue of who manages the owner's business affairs in case of disability by a durable power of attorney. They point out that a trust may avoid probate, but it does not avoid estate and inheritance taxes on the trust assets.
