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Oswego Business Estate Planning Lawyer: Business Estate Planning

 Posted on March 20, 2023 in Estate Planning


Business estate planning is vital for Oswego households, particularly owners of closely held business enterprises and family businesses. Additionally, estate planning is critical for high-net-worth and high-income families in Kendall County and surrounding areas.

Asset management and business wealth planning strategies create a solid foundation in case of death or incapacity. Family business and personal asset protection are also critical to safeguard a family's assets from potential litigation threats.

This article covers essential asset management and business estate planning strategies for savvy business owners.

Estate Planning Tips for Businessmen in Oswego

A risk assessment is a step in reviewing a family or business owner’s risks and gaps in their estate planning. A risk assessment also will examine a person’s vulnerabilities that might affect a business or family’s financial viability and retirement solutions. Performing a risk assessment is the preliminary step in proactive business estate planning when advising business owners and their families. Developing a comprehensive estate plan also will set up a smooth process for a family and family-owned business in case of death or incapacity.

As Oswego Business Estate Planning attorneys, we assist Oswego families in discovering their problems and developing strategies that fill the vulnerabilities with systems that protect one's assets. Unfortunately, these vulnerabilities produce concern and fear, which inhibit peace of mind. Our Oswego Planning Estate attorneys provide solutions that deliver peace of mind and sound estate planning strategies. The second part of the process is to identify the client and their family and identify their family's concerns and family conflicts. These family conflicts are often blind spots, likely to produce family strife and conflict.

A business estate planning attorney at Peace of Mind Asset Protection, LLC assists clients in conducting a thorough risk assessment to detect possible dangers to their assets, such as litigation, creditor worries, or economic decline.

Essential Documents for Business Estate Planning in Oswego

This section will discuss critical estate planning documents for any business estate plan. Whether your business is in Kendall County, Oswego, or nearby areas, this section will discuss viable estate planning solutions for you and your family. These documents are:

  1. Living Trusts for Estate Planning

A Living Trust is a legal document that sets forth one’s objectives. A Living Trust is the foundation of producing one's legacies and documenting one is wishes in case of death or incapacity. A family or individual establishes a Living Trust or a "Revocable Living Trust." In this document, the creator of the Living Trust names a trustee or co-trustee to oversee and manage the execution of their estate in case of death or incapacity. The Living Trust will administer and supervise their estate and trust administration in case of their absence. A Living Trust is similar to forming a Limited Liability Company or Corporation because a management team is responsible for the day-to-day management of the business assets. With a living trust, the trustee or co-trustee is/are responsible for the execution of the trust agreement. The Trust Agreement is the written document that produces one's intentions and outlines the strategies to address potential vulnerabilities. A Living Trust is 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 requires precision and evaluating critical aspects of one's family structure. First, family structure is analyzed to identify essential conflicts that may cause concerns and disputes. Therefore, attorneys must ask questions to determine one's family concerns and weaknesses that will cause strife and trouble.

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 questioning 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—asset management strategies aid, and liability reviews assist in identifying existing vulnerabilities.

A business estate planning attorney in Oswego and Kendall County may also assist clients in developing asset management measures identified in the risk assessment interviews. Asset protection involves using legal entities like trusts or limited liability companies to protect vulnerable assets from potential liability concerns and threats.

Additional asset protection strategies include advising on insurance gaps, developing business tax solutions, and vetting all employee contracts, non-disclosure agreements, and non-compete agreements. These strategies are critical because they identify potential conflicts that threaten one's financial viability.

The business estate planning attorneys at Peace of Mind Asset Protection, LLC simplify asset management by producing strategies that protect one’s business and family’s vulnerabilities. These vulnerabilities cause headaches, destroy one's legacy, and cause costly family problems upon death or incapacity. Therefore, we ensure that all your needs are prioritized and handled with utmost care to secure your family and future.  

  1. Power of Attorney

An Oswego 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 are 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 could make checking deposits, dissolve banking accounts, and even sell real estate.

The financial power of attorney is essential because it enables the principal to plan for the risk of disability by guaranteeing that somebody they trust can handle their finances if they become incapable due to sickness, accident, or old age. Without a power of attorney for property, a loved one may require a court process known as guardianship may be necessary. Guardianship court limits personal liability 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 preventing future family conflicts by pre-designating who has the authority.

What we can take away 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. Furthermore, 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 Oswego

Life insurance is an excellent resource for families. Life insurance replaces an individual's or family's earnings in the event of their death. Business estate tax planning is structuring a person's wealth to minimize the sum of estate taxes owing upon their unfortunate demise.

In Oswego 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%. As a result, life insurance is a substantial asset that may force a person's relatives into a taxed estate in Illinois. The purpose of the Irrevocable Life Insurance Trust, often called an “ILIT,” comes in handy. An ILIT is a form of trust utilized to hold a life insurance policy for the trust's beneficiaries. The trust is “irrevocable” because, once established, the person who found the trust, the grantor, cannot amend the trust's provisions or withdraw assets deposited in the trust.

Advantages of an ILIT in Oswego

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

When a person dies, their properties must undergo probate before being dispersed to the 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 under 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 the estate.

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

Contact an Oswego and Kendall County Business Estate Planning Attorney Today

Peace of Mind Asset Protection, LLC 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 using 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 significantly decrease or eliminate legal concerns. Call an Oswego Business Estate Planning attorney at 630-882-2467 or use our online contact form, and an attorney or member of our staff will contact you to schedule your first consultation.

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