Being a business owner has many benefits. Apart from the financial rewards, you become independent and get many learning opportunities. Therefore, it is imperative to protect your investment.
While there are many ways to protect your business, trust planning can go a long way in ensuring the safety of your assets, especially if you plan on leaving them to future generations. Here are a few ways a trust can benefit your business:
1. It allows you to include a succession plan
Having a succession plan is crucial. It ensures your business will run without any hitches if you retire or pass away. That being said, a trust can be established to ensure your succession plan aligns with your business’s legacy goals. In addition, the trust can indicate what you want for your business, for example, if you plan on selling it or leaving it to your family.
2. It gives you asset protections
Assets included in the trust are protected from personal creditors, and it helps protect your assets from any of the company’s creditors because the trust owns your share of the business – not you. That makes a business trust an alternative to something like a limited liability corporation.
3. It can minimize estate taxes
Inherited assets that exceed a certain amount of money are subject to estate tax. However, establishing a trust may help protect your business and your heirs from this burden. This can help save a lot and increase the wealth you want to sell or pass on to your family.
As a business owner, your business is your wealth. But have you thought about what will happen after you die? Having a business trust can offer significant protections for you while you’re alive and ensure that the business lives on after you are gone.
