Aurora Business Estate Planning Attorney: Business Estate Planning

 Posted on February 23, 2023 in Estate Planning

Business Estate Planning is vital for households in Aurora and other nearby regions in Kendall County, Illinois, especially owners of small to medium-sized enterprises and their families. In addition, high-income and high-net-worth households typically need significant business estate planning.

Asset management and thorough estate planning will create a solid legal foundation for protection against death and incapacity. Furthermore, a robust asset management plan will place safeguards against a person's family and personal assets.

The most crucial asset management and business estate planning strategies for savvy business owners will be covered in this article.

Estate Planning Tips for Businessmen in Aurora

Performing a risk assessment is the preliminary step in proactive business estate planning when advising business owners and their families. A risk assessment examines an individual's assets and the legal threats that might affect a business's financial stability and retirement plans.

As Aurora Business Estate Planning attorneys, we assess clients and their families to discover their problems, such as what keeps the client worried and what they are always concerned about. The second stage is to interview the client and their loved ones to assist them in developing their business estate plans.

A business estate planning attorney at Gateville Law Firm assists clients in conducting a thorough investigation and risk assessment to detect possible dangers to their assets, such as litigation, creditor worries, or economic decline.

Essential Documents for Business Estate Planning in Aurora

A few essential documents are vital to any business estate plan, whether your business is in Aurora or other neighboring areas of Kendall County. These documents are:

1. Living Trusts for Estate Planning

A Living Trust is a legal instrument that lays out one's objectives and legacies. A couple or a single individual establishes a Living Trust and names a trustee or co-trustee to administer and monitor their financial assets. A Living Trust is similar to forming a Limited Liability Company or Corporation and naming a management team to oversee day-to-day activities. A Living Trust is like a life roadmap and a contingency plan that outlines who will inherit one's hard-earned personal and business assets.

Creating an estate plan for a business owner necessitates careful preparation and evaluation of several aspects, including the individual's family structures and any conflicts that may arise. When creating an estate plan for a successful business owner in Aurora, attorneys must follow a few aspects.

Firstly, when identifying a person's goals and objectives, one must evaluate their family structure and any conflicts that may arise, such as stepchildren or blended family issues. One method of discovering prospective estate disputes is questioning the client since they understand their family dynamic. It is also essential to pinpoint the individual's personal and commercial assets, such as business holdings, individual property, property investments, and financial accounts. This aids in identifying existing vulnerabilities.

A business estate planning attorney in Aurora and Kendall County may also assist clients in developing asset management measures based on the risk assessment results. This might involve using legal organizations like trusts or limited liability companies to protect assets from potential litigation.

Other key aspects include providing advice regarding insurance gaps, helping the businessman plan their taxes, and vetting any employee contracts, NDAs, non-competes, etc., to protect all essential business strategies and trade secrets.

The business estate planning attorneys at Gateville Law Firm are experienced in dealing with complex business estate matters, conducting thorough risk assessments, and evaluating the entire situation to eliminate any vulnerabilities that may arise with all critical aspects mentioned above. We ensure that all your needs are prioritized and handled with utmost care to secure your family and future.  

2. Power of Attorney

An Aurora Estate Planning Attorney can help you and your family create a power of attorney for assets, usually called a "financial power of attorney." A financial power of attorney is a legal instrument that permits a person known as the "principal" to designate another person known as "the agent" or "attorney-in-fact" to handle their financial arrangements if they develop disabilities or are otherwise unable to carry out their daily affairs independently.

A person will still require the services of an attorney because being designated as an "attorney-in-fact" does not provide the right to practice law. But, among many other crucial economic matters, the attorney could make checking deposits, dissolve banking accounts, and even sell real estate.

The financial power of attorney is crucial because it enables the principal to plan for the risk of disability by guaranteeing that somebody they trust can handle their finances if they become incapable due to sickness, accident, or old age. It is also crucial to remember that in the absence of a power of attorney for property, a court process known as guardianship may be required, which limits a person's liberty and requires the court to authorize financial decision-making. In the case of a financial emergency, the financial power of attorney saves thousands of dollars in attorney expenditures too.

Aside from these considerations, this legal tool ensures flexibility in decision-making and aids in preventing future family conflicts by pre-designating who has the authority.

What we can take away from this is that a financial power of attorney creates a plan to reduce risks and a strategy to solve financial problems in the case of incapacity. Furthermore, a living trust, as opposed to a will, ensures a smooth transition in the event of financial disability. A will is simply a legal document that addresses the subject of wealth distribution following death. Therefore, a power of attorney for property decreases the legal dangers of disability while also establishing a practical and robust strategy for designating attorneys in fact and other substitutes.

Strategies for Life Insurance and Taxes in Aurora

For high-income families, life insurance is a great resource. Life insurance is intended to replace an individual's or family's earnings in the event of their death. Estate tax planning is structuring a person's wealth to minimize the sum of estate taxes owing upon their unfortunate demise.

In Aurora and other parts of Kendall County, Illinois, estates worth more than $4 million are subject to the estate tax. The tax rate is graduated, with a peak rate of 16%. As a result, life insurance is a substantial asset that may force a person's relatives into a taxed estate in Illinois. This is where an irrevocable life insurance trust, often called an “ILIT,” comes in handy. An ILIT is a form of trust utilized to hold a life insurance policy for the trust's beneficiaries. The trust is “irrevocable” because, once established, the person who found the trust, the grantor, cannot amend the trust's provisions or withdraw assets deposited in the trust.

Advantages of an ILIT in Aurora

The utilization of exemptions and exclusions in Aurora and other areas of Kendall County, Illinois, may lower the taxable value of an estate. The estate tax, for example, does not extend to transfers to a surviving spouse or non-profit organization. Moreover, estate tax planning uses trusts to tax-free transfer a family's wealth to loved ones.

When a person dies, their properties must undergo probate before being dispersed to the recipients. Once the Life Insurance policy is placed in an ILIT, the proceeds from the policy will be paid directly to the trust, which will subsequently distribute the proceeds to the recipients under the conditions of the trust deed.

Also, as mentioned before, if a person's estate surpasses the appropriate estate tax allowance, their beneficiaries may be required to pay estate taxes on the extra amount. By putting a life insurance policy in an ILIT, the death benefit can be utilized to pay estate taxes or, better yet, to avoid estate taxes by keeping the life insurance asset out of the estate. The estate taxation issue is avoided by keeping the life insurance asset outside the estate.

The ILIT can also be set up so that specialists are selected to manage the trust and safeguard the recipients from inexperience, immaturity, or a lack of financial competence.

Contact an Aurora and Kendall County Business Estate Planning Attorney Today

Peace of Mind Asset Protection, LLC focuses on estate and business planning for business owners and their families. To position their assets attractively, high-net-worth and high-income households require extensive planning that includes using trusts, limited liability companies, and other liability-reducing methods like the ones stated above.

Placing one's possessions in a comfortable position, such as real estate, commercial holdings, and other assets, can significantly decrease or eliminate legal concerns. Call an Aurora Business Estate Planning attorney at 630-882-2467 or use our online contact form, and an attorney or member of our staff will contact you to schedule your first consultation.