While you might be familiar with some of the estate planning concerns faced by individuals, did you know that business owners often have unique estate planning needs that require careful attention? Whether you're a business owner yourself or advising clients who are, creating a tailored estate plan is essential for protecting both personal and business assets, and ensuring a smooth transition. Here are three key considerations that business owners in Ontario should be aware of.
1. Primary and Secondary Wills: Maximizing Probate Tax Efficiency
Business owners with incorporated private businesses can benefit from establishing both primary and secondary wills. A primary will covers personal assets, while a secondary will can be used to transfer business assets. This planning strategy can result in a reduction of estate administration taxes assets. By using a secondary will to transfer business assets like private shares , business owners can have significant probate tax savings depending on the value of the businessmakinghis a valuable strategy for private business owners .
2. Business-Specific Powers of Attorney: Ensuring Continuity
Having a Continuing power of attorney for property specifically for business matters is important for business owners, and particularly for those who are sole proprietors or sole shareholders of an incorporated business. A trusted and knowledgeable individual can be appointed to manage business affairs in the event of incapacity. Proper planning will help to safeguard the future of the business and prevent potential disruptions to business operations.
3. Shareholder Agreements: Planning for Unexpected Events
For private businesses with multiple shareholders, a shareholders agreement is vital. This agreement outlines what happens in the event of a shareholder’s death, incapacity, or marital breakdown, ensuring the business remains protected. Without a well-drafted agreement, disputes among shareholders can arise, potentially jeopardizing the business and leading to costly and lengthy legal battles. An estate plan that accounts for specific ownership structures ensures that business transitions are handled smoothly and in accordance with requisite expectations.
Tailored Solutions for Business Owners
At Estate Stewards, we help business owners navigate the complexities of estate planning. Whether you need a comprehensive estate plan or simply have questions about your existing arrangements, our team is ready to assist. Contact us today to discuss how we can help safeguard both your business and personal legacy for the future.