Some people go into business so that they can have a legacy to pass on to their family. Many others are interested in creating a form of income to take them to retirement, at which point they will sell their business to boost their retirement funds. Whatever someone intends to do, it is important that they both plan for what they want to happen and draft a legal document that will enable their plan to work.
Business transactions can be a slow process, and it’s important that people don’t delay when they are wanting to sell a company or pass it on to someone. Failing to do so can put a business owner in a bad position, either resulting in the loss of a lucrative sale or being unable to leave business interests in the way that they had originally planned.
Living trusts can be a great way to set up an exit strategy for many small businesses, including sole proprietorships and partnerships. The advantage of a living trusts is that people are still able to manage assets and organizations during their lifetime but another individual is assigned to take over if something unexpected happens.
Whether someone intends to sell a business, create a living trust for it or figure out the best way to deal with running a business after owners retire, it is important to make sure that the plan is designed to fit the goals of the individual. How a trust is set up can make a huge difference in how it is run and who is in charge of running it. A business planning attorney could help owners what their options are and create a plan that fits their circumstances and wishes.
This information is general in nature and should not be construed as tax or legal advice.