As a business owner, you’ve spent years—maybe even decades—building your company from the ground up. You’ve handled everything from hiring and growth strategies to operations and contracts. But one area that often gets overlooked is what happens to your business and personal assets after you’re gone. That’s where an estate plan including a will and trust come in—and why they’re an essential part of any business owner’s succession plan.
What Happens If You Don’t Have an Estate Plan?
If a business owner passes away without a will or trust in place, the consequences can be significant. In California, that often means a lengthy probate process, where the court determines how assets—including ownership interests in a business—are distributed. This can tie up your business in legal proceedings and create confusion for your loved ones, employees, and partners.
Without a clear directive, the court could appoint someone unfamiliar with your company to handle your estate. That’s a risky situation, especially for small businesses where the owner is central to operations. In addition, if your shares in your company are not held in the name of your trust, an expensive probate case will need to be opened for a Court to determine who will inherit your shares and be able to manage your company. This can lead to major difficulties in running your company after you are deceased not to mention the pain and anguish experienced by your loved ones.
Why You Need a Living Trust and a Will
A living trust is a key estate planning tool for business owners. Unlike a will, a trust allows your assets—including business interests—to be transferred outside of probate. It provides greater control, keeps your affairs private, and can ensure that the right people are in place to keep your business running.
By placing your business into a trust, you can name a successor trustee who will take over management if you become incapacitated or pass away. That kind of planning can help protect the business you’ve built and minimize disruption for employees and clients. A properly drafted will allows you to transfer property to your trust without the need for probate administration.
How Estate Plans Fit Into a Succession Plan
At Lanak & Hanna, we often talk to business owners about succession planning. It’s not just about finding someone to take over the day-to-day operations. It’s also about putting the legal framework in place—documents like Buy-Sell agreements, corporate resolutions, and estate planning tools such as wills and trusts.
These components work together to ensure continuity, stability, and a clear path forward—whether your plan is to sell the company, pass it down to family, or transition to a key employee.
Start the Process Early
We recommend starting your succession planning about five years before you plan to retire or sell the business. This gives you time to identify your successors, value the company, update corporate records, and coordinate your estate plan.
As part of this process, we help clients gather all critical business information—passwords, contracts, corporate documents—and ensure they’re organized and accessible to future decision-makers. We also recommend reviewing any existing estate plan documents every five years to ensure they are current and adhere to your current plans.
We’re Here to Help
If you’re a business owner in California and you don’t yet have a will or trust in place—or it’s been years since you reviewed it—I encourage you to take action. At Lanak & Hanna, we combine decades of business law experience with personalized estate planning services. We’ll help you create a comprehensive plan that protects your legacy and gives you peace of mind.
Reach out today to schedule a consultation. Let’s make sure your business is built to last—for this generation and the next.
Reach out today to Jim Millane at (714) 451-7754 or by email at [email protected] to schedule a consultation. Let’s make sure your business is built to last—for this generation and the next.
