Business Entities and Estate Planning: A necessary relationship

jessieheadshotBy: Jessica Moon

At Roth & Bacon, we work with many clients and their business entities—all the way from large employers who may employ fifty or more to single member entities.  We these clients, we focus on maintaining their businesses and framing up their estate plans to complement any business plans they have laid out.  Invariably, a conversation on one of those topic(s) leads to the other.   I am often surprised by Attorneys who handle some business planning but no estate planning for their clients and vice versa.  In my area of practice, I have found that practice in either area requires at a minimum basic knowledge in both business and estate planning.

In estate planning, our clients focus on how their assets will pass and who those assets will pass to.  We prepare the necessary documents to pass title and interest and to avoid unnecessary administration costs where we can.  We also ensure that there are always multiple contingencies in the event that the initial plans cannot be fulfilled, due to death or incompetency.  We also prepare documents that allow others to step in during the client’s lifetime, in the event that client himself has lost the ability to speak for himself.  In this way, the client and his estate remain a personal matter and one that is entrusted solely to those whom the client has names and trusts.

Business planning requires much of the same focus.  With business clients, we need to ask the right questions of our clients:  will this business continue after you pass away?; who will control the interests and how will they receive that control?; will this transfer of ownership occur upon stated events, sales, transactions, during life or upon death?  With these issues, we need to carefully consider many of the same issues that we do in estate planning, i.e.: the client’s age, capacity, family, and surrounding, trusted advisors.

Business Entities, like estates, are not all the same; each one comes with its own complexities and issues to consider.  While some interests may easily pass in a generic distribution plan, most do not.  Each plan should specifically address the internal framework of the entity and the other available assets in the client(s) estates.  Our plans necessarily depend on whether or not this business is closely held by family members only, publicly traded, whether the business is a corporation, a limited liability company, or a limited partnership, among others.  In business, like estate planning, we ask whether or not there are insurance policies in place to affect the smooth transfers of interest.   We must also address the tax implications of any proposed transfers of both estate assets and business interests.  These are all reasons that basic knowledge in many areas is a prerequisite to good planning in either.

Roth & Bacon believes that we cannot properly plan for our clients without all the information.  We need to know the client fully and the players/individuals on each side (both for business and for the estate).  At Roth & Bacon, we insist on working with the client’s CPA or accountant, where applicable, in order that everyone is on the same page with regard to the client’s plans and goals.   We believe any estate plan should flow seamlessly with a client’s business plan and vice versa.  Does your attorney?  If not, perhaps you should consider speaking with one who does.


This article was written by Jessica B. Moon, Attorney licensed in Ohio and Florida.   David Bacon and Jeffrey Roth, and Jessica Moon are Member Attorneys in Roth & Bacon Attorneys, LLC.  Their Offices are located in Upper Sandusky, Marion, and Port Clinton, Ohio, and Fort Myers, Florida. They have focused their practice to provide estate and business planning concepts to their clients.  Nothing in this article is intended for, nor should be relied upon as individual legal advice.  The purpose of this article is to help educate the public on concepts of law as they pertain to estate and business planning.

Copyright @ Jessica B. Moon 2013.

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