Plano Business Estate Planning Attorney: Business Estate Planning

 Posted on February 07, 2023 in Estate Planning

In Plano and other surrounding areas of Kendall County, Illinois, estate planning is essential for households especially for owners of small to medium-sized businesses and their families. High-net-worth and high-income households normally have extensive estate planning requirements.

Comprehensive estate planning and asset management will lay a strong legal basis to safeguard against disability and deaths. More significantly, developing a good asset management strategy will put in place safeguards to protect a person's and his/her family's business and personal assets from potential risks that endanger assets.

This blog will go through the most important estate planning and wealth management techniques for successful business owners.

Estate Planning Tips for Businessmen in Plano

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

As Plano 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 conduct an interview with the client and their loved ones in order to assist them in developing their estate plans.

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

Essential Documents for Business Estate Planning in Plano

There are a few very essential documents that are key to any business estate plan whether your business is located in Plano or other neighbouring 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 kind of 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 a number of aspects, including the individual's family structures and any conflicts that may arise. When creating an estate plan for a successful business owner in Plano, there are a few aspects all attorneys must follow.

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 to question 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 Plano and Kendall County may assist clients in developing asset management measures based on the results of the risk assessment as well. This might involve using legal organizations like trusts or limited liability companies to protect assets from potential litigation.

Other key aspects including providing advice regarding any insurance gaps, helping the businessman plan their taxes, and also vetting any and all employee contracts, NDAs, non-competes, etc. so that all important business strategies and trade secrets are protected.

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 key aspects mentioned above. We make sure that all your needs are prioritized and handled with utmost care to secure your family and your own future.  

2. Power of Attorney

A Plano 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 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 would have the authority to make checking deposits, dissolve banking accounts, and even sell real estate.

The financial power of attorney is a particularly important document because it enables the principle to plan for the risk of disability by guaranteeing that somebody, they trust can handle their finances if they become incapable as a result of 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 the prevention of future family conflicts by pre-designating who has the authority.

What we can take way 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. 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 Plano

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 the act of structuring a person's wealth in such a manner that the sum of estate taxes owing upon their unfortunate demise is minimized.

In Plano 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%. 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 known as a “ILIT,” comes in handy. An ILIT is a form of trust that is utilized to hold a life insurance policy on behalf of the beneficiaries of the trust. The trust is “irrevocable” because, once established, the person who established the trust, also known as the grantor, cannot amend the provisions of the trust or withdraw assets deposited in the trust.

Advantages of an ILIT in Plano

The utilization of exemptions and exclusions in Plano 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 transfer a family's wealth to loved ones tax-free.

When a person dies, his or her properties must undergo probate before they can be dispersed to the respective 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 in accordance with 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 of their estate.

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

Contact a Plano and Kendall County Business Estate Planning Attorney Today

The Gateville Law Firm 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 the use of 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 greatly decrease or eliminate legal concerns. Call a Plano Business Estate Planning attorney at 630-780-1034 or use our online contact form, and an attorney or member of our staff will contact you to schedule your first consultation.