Estate planning in New York is an important consideration for all individuals. When a person dies, assets are disposed of according to the laws in New York. If property passes upon death by operation of law then named beneficiaries or joint owners become the owners. Where assets are held in the sole name of the decedent with no beneficiary and there is no Last Will and Testament, the intestate estate is distributable to a decedent’s next of kin. However, the distribution of these same assets owned solely with no beneficiary can be controlled by the terms of a Will. The New York Probate Lawyer Blog has discussed estate planning in many articles.
In the case of a small business owner, particular care and examination must be made as to the consequences of the death of the owner.
To begin with the business owner must assess the nature of the business assets. Is the ownership interest in the form of stock or shares held in a corporation or a membership interest in a limited liability corporation? Perhaps the owner is a partner in a partnership or possibly, there is no actual business entity.
Additionally, the owner must examine whether there are any business agreements or contracts with other owners or partners which may control the disposition of the owner’s share of the business on death. There may be shareholder agreements or limited liability company operating agreements or partnership agreements. Sometimes life insurance is owned so business partners can buy-out a deceased owner’s interest. An estate lawyer can review these documents so that their terms can be understood as to possible estate planning consequences.
In addition, it is important to have some general idea as to the value of the business interest. When the time for estate settlement arrives, the value of the asset needs to be established for possible estate tax issues and also income tax considerations if the asset needs to be sold and income reported.
Another important consideration is the intended beneficiary of the business interest. Is the beneficiary someone who wants to continue the business or has the ability to do so? Also, can the beneficiary work with any surviving business partners?
An executor or administrator of an estate needs to be particularly diligent when dealing with the business interests of an estate. Inadequate planning can result in estate administration delays.
The creation and success of a business is difficult and time consuming. A business owner needs to consider the issues involved in transferring a business interest in the event of death. I have represented many individuals in estate business planning. When there is a poor or incomplete plan there may be estate litigation in the Surrogate’s Court to resolve business disputes. Call me now for a free review. We provide reasonable and flexible fee arrangements and personal representation.
New York Trusts and Estates Attorney Jules Martin Haas has helped many clients over the past 30 years resolve issues relating to probate and estate settlement throughout New York City including the Bronx, Brooklyn, Manhattan and Suffolk County. If you or someone you know has any questions regarding these matters, please contact me at (212) 355-2575 for an initial consultation.