• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer
  • Home
  • Our Firm
    • Areas We Serve
      • Riverside County
        • Banning
        • Corona
        • Eastvale
        • Hemet
        • Menifee
        • Moreno Valley
        • Murrieta
        • Norco
        • Perris
        • Sun City
      • San Bernardino County
      • Orange County
      • Los Angeles County
      • San Diego County
    • Attorney and Staff Profiles
    • Our Reviews
    • Review Us
  • Elder Law
    • Conservatorships
    • Crisis Planning
    • Estate Planning for the Elderly and Chronically Ill
    • Planning for Long Term Medi-Cal
    • Planning for Veteran’s Aid and Attendance
  • Estate Planning
    • Advanced Estate Planning
      • Asset Protection Lawyer
      • Business Succession Planning
      • California Gun Trust
      • Charitable Planning & Philanthropy
      • Trustee Services
    • Estate Planning Service
    • LGBTQ+ Estate Planning
    • Married Couples Estate Planning
    • Persons with Large Retirement Accounts
    • Pet Planning
    • Special Needs Children
    • Special Needs Trusts
    • Trust Administration
    • Unmarried Couples Estate Planning
    • Unmarried Individuals Estate Planning
  • Probate
  • Will & Trust Contests
    • Conservatorship Contests
    • Probate Litigation
    • Tax Controversy and Tax Planning
    • Trust Litigation
    • Will Contests
  • Resources
    • Riverside, California Elder Law Resources
    • Docubank
    • Downloadable Handbooks
    • Elder Law
      • Elder Law Resources
    • Estate Planning, Elder Law and Tax Law Articles
    • Free Report – Able Account or Special Needs Trust
    • Free Report -Constructing Your Revocable Trust
    • Probate and Trust Administration
      • Bereavement Resources
    • Speaking Engagements
    • Useful Estate Planning, Elder Law and Tax Links
    • Webinars
  • Ask Dennis
  • Webinars
    • Webinar Recordings
    • Upcoming Webinars
  • Blog
  • Contact Us

Inland Empire Estate Planning Attorneys

Sandoval Legacy Group, a division of Holstrom, Block & Parke, a Professional Law Corporation

Connect with us today(855) 513-9876

Text Size A A A
LIVE WEBINARS REGISTER TODAY>>
Home » How to Protect Business Assets in Your Estate Plan

How to Protect Business Assets in Your Estate Plan

June 26, 2020business succession

Riverside asset protection lawyers

If you are one of the millions of Americans for whom owning a small business is part of the American dream, don’t forget to include that business in your comprehensive estate plan. After all, you undoubtedly invested a considerable amount of your time, energy, and resources into building your business.  The Riverside business succession  lawyers at Sandoval Legacy Group offer some common tips for how to protect your business assets in your estate plan.

The Importance of Protecting Your Business Assets

As you undoubtedly know from first-hand experience, getting a small business off the ground and turning a profit is extremely difficult. The reality is that the odds are against you. If you managed to beat those odds, you should certainly be proud; however, it is equally important to protect your business going forward. In addition, you must act while you are at the helm so that the eventual transfer of ownership occurs in an orderly fashion and without any negative consequences to the business. Business succession planning can help you do all of that.

Is Your Business at Risk?

Many small businesses owners are unaware of the numerous and varied ways in which the business might be at risk. In terms of protecting their business, first-time entrepreneurs tend to cover only the basics without realizing the areas of vulnerability that they may have missed, such as:

  • Business structure – many first-time business owners incorporate their business because they are under the impression that incorporating shields them from personal liability. While a true corporation does provide protection from personal liability, creditors can try to “pierce the corporate veil” if proper procedures are not followed and business income, expenses, assets and debts are not kept separate from the owners income, expenses, assets and debts. Choosing the right business entity and following the proper procedure is crucial to obtaining personal asset protection from a business entity.
  • Incapacity – if you were to become incapacitated tomorrow, who would step in a run the business? Would that person have the legal authority to operate the business? Would suppliers, creditors, and customers accept that person’s authority? Have you discussed the possibility with your designated replacement or are you simply assuming he or she will step in? Incorporating an incapacity planning component into the business succession portion of your estate plan is the only way to plan for the possibility of your own incapacity.
  • Sale of the business upon your death – if you do not plan to pass the business down to the next generation, planning for the sale of the business upon your death is imperative. Failing to do so could result in either the complete loss of the business or the business being sold for a fire sale price because your surviving spouse and/or children have no direction from you and no plans were put in place for a successful transition.  A  Buy-Sell Agreement is one strategy that can be implemented ahead of time  toprevent  a disastrous outcome for your family members as well as the employees who work for the business.
  • Passing the business down to the next generation – you have undoubtedly heard the less than optimistic statistics about a small business’s chances of making a successful transition to the next generation. The single biggest reason for a business failing to make that transition successfully is a lack of planning. A business succession plan that is put into place while you are still living and that family members who will take over the business can begin to participate in while you are alive is the key to the next generation being able to keep the business alive. Having sufficient liquidity to cover the transition period is especially crucial, and this is often done through the use of an irrevocable life insurance trust.
  • Federal gift and estate taxes business owners with substantial wealth are  potentially subject to federal gift and estate taxes. Your business is part of your estate and its  value of  will be included in determining the taxation of your estate. Like many small businesses, your business may lack liquidity because the value is tied up in inventory, equipment, buildings or other tangible assets. That could result in the need to sell business assets to raise the necessary cash to pay a  estate tax bill which could be fatal to your business. Here again, building liquidity using an irrevocable life insurance trust may be one solution to this challenge. Other planning strategies include gifting part of the business to family members at a discounted value through the use of various advanced estate planning strategies.

How Can Your Estate Plan Help?

All of the above-mentioned risks can be alleviated by incorporating a business succession planning component in your comprehensive estate plan. Considering everything you have likely sacrificed to get your business to where it is today, why would you put it at risk by not planning ahead for tomorrow?

Contact Riverside Asset Protection Lawyers

If you have additional questions or concerns regarding how to protect your business assets in your estate plan, contact the experienced Riverside asset protection lawyers at Sandoval Legacy Group by calling (951) 888- to schedule an appointment.

Have a question? Ask Dennis.
















  • Author
  • Recent Posts
Dennis Sandoval
Dennis Sandoval
Dennis Sandoval is the only attorney in California who has certifications in the three areas of estate planning, elder law and taxation. In 2014, the National Academy of Elder Law Attorneys (NAELA) designated Dennis as a Fellow, an award given to less than 100 elder law attorneys across the United States. He received his Certified Estate Planning, Trust and Probate Law Specialist designation from the California Bar Board of Legal Specialization in 1998 and his Certified Taxation Law Specialist designation in 2000 from the same organization. He is a Certified Elder Law Attorney (CELA), a designation he proudly received in 2004 after meeting all the requirements established by the National Elder Law Foundation (NELF) and the American Bar Association. Dennis has also holds the designation as an Accredited Estate Planner® (AEP) from the National Association of Estate Planners and Councils.
Dennis Sandoval
Latest posts by Dennis Sandoval (see all)
  • 5 Reasons to Hire a Lawyer to Help You Probate an Estate - June 23, 2021
  • How Do I Become My Father’s Guardian? - June 26, 2020
  • 5 Steps for an Executor to Take Control As Soon As Possible - June 26, 2020

Other Articles You May Find Useful

Southern California Estate Planning Attorneys
Riverside Estate Planning Attorney Speaks at Business Owners Workshop
Southern California Estate Planning Attorneys
Riverside Estate Planning Attorney Studies Business Succession Issues and Strategies

About Dennis Sandoval

Dennis Sandoval is the only attorney in California who has certifications in the three areas of estate planning, elder law and taxation. In 2014, the National Academy of Elder Law Attorneys (NAELA) designated Dennis as a Fellow, an award given to less than 100 elder law attorneys across the United States. He received his Certified Estate Planning, Trust and Probate Law Specialist designation from the California Bar Board of Legal Specialization in 1998 and his Certified Taxation Law Specialist designation in 2000 from the same organization. He is a Certified Elder Law Attorney (CELA), a designation he proudly received in 2004 after meeting all the requirements established by the National Elder Law Foundation (NELF) and the American Bar Association. Dennis has also holds the designation as an Accredited Estate Planner® (AEP) from the National Association of Estate Planners and Councils.

VIEW RECORDED WEBINARS

“How To Create a Peace of Mind Out of Chaos” Recorded Wednesday, September 16 @ 11AM WATCH NOW

Inland Empire Estate Planning Attorney

Inland Empire Estate Planning Attorney

BLOG SUBSCRIPTION

  • This field is for validation purposes and should be left unchanged.

Follow Us

  • Facebook
  • Instagram
  • LinkedIn
  • RSS
  • YouTube

Where We Are

Sandoval Legacy Group, A Professional Law Corporation

See Larger Map Get Directions

Office Hours

Monday8:00 AM - 5:00 PM
Tuesday8:00 AM - 5:00 PM
Wednesday8:00 AM - 5:00 PM
Thursday8:00 AM - 5:00 PM

Friday by appointment only

Map

4300 Latham St., Riverside, CA 92501
SLG Riverside Office | 4300 Latham St., Riverside, CA 92501  •  Corona | 1897 California Ave., Ste. 102, Corona, CA 92881  •  Newport Beach | 4940 Campus Dr., Ste. A, Newport Beach, CA 92660  •  Temecula | 40810 County Center Drive, Ste. 150, Temecula, CA 92591  •  Riverside | 3780 12th Street, Riverside, CA 92501  •  San Diego | 3110 Camino Del Rio S., Ste. 308, San Diego, CA 92108  •  Vista | 380 S. Melrose Dr., Ste. 347, Vista, CA 92083

  • Disclaimer
  • Privacy Policy
  • Sitemap
  • Contact Us

Connect To Us

  • Facebook
  • LinkedIn
  • RSS
  • Twitter
  • YouTube
footer-logo

© 2023 Sandoval Legacy Group
A division of Holstrom, Block & Parke,
A Professional Law Corporation.
All Rights Reserved.