When most people think about their estates moving through the probate process, they are usually concerned with their physical property. However, people should not underestimate the importance of handling financial assets. Even if a person successfully develops a thorough estate plan that accounts for financial holdings and bank accounts, they may still fail to manage vital assets and comprise a significant portion of their estate’s value.

For example, your business interests are as much a part of your estate as your home, bank accounts, and physical property. An ownership stake in a company must be transferred to another person after you pass away. Similarly, any stock that you hold also needs to make it through the probate process.

For these reasons, it can be helpful to have a business succession plan in place that determines what you want to happen to these valuable assets in the future. A knowledgeable probate lawyer could explain how Mount Laurel probate affects business succession, to help you create the best plan for your company and assets.

What is the Purpose of a Business Succession Plan?

A business succession plan is a testamentary document that is similar to a will. However, these arrangements can provide a much greater level of flexibility for individuals with their own companies. For example, a business succession plan can specify what someone wants to happen to their financial holdings after their death. Popular options include a direct transfer of stock to an heir, the forced sale of said stock back to the company, or even the complete dissolution of a business.

Business succession plans can also have a profound impact on a company long before a person’s death. These arrangements could outline a planned future retirement date. Preparing for this day could get a company ready for a sale, transfer, or other scheduled winding down of a principal manager’s role in the operation.

A comprehensive plan could also include contingencies that go into effect in the event of an emergency. If a business owner encounters a situation where they are no longer able to perform their role due to illness or injury, an airtight plan can explain their wishes to partners or board members.

How Probate Affects Uncategorized Business Assets

Effective estate planning requires an individual to fully account for all their assets. Commonly overlooked financial properties include shares of stock, a percentage of an LLC or partnership, or some other business holding.

When a person overlooks these business assets, they might lose them in the probate process. For instance, if a will fails to specifically mention a set of business holdings, the court may order the redistribution of those assets according to the state’s intestacy rules. New Jersey Revised Statute § 3B:5-3 explains that this redistribution could result in a splitting of assets to spouses and children in a way that forces the sale or dissolution of a company.

Because of these strict rules, failing to account for the full extent of one’s corporate assets during the probate process could greatly affect one’s business succession. A detail-oriented attorney in Mount laurel could help an estate administrator stay on top of all their valuable holdings.

Ask an Attorney about how Mount Laurel Probate Affects Business Succession

It is essential to remember that a business succession plan is a vital part of any estate framework. Arranging the continuation of your company after your death ensures that these estate assets move forward to your intended heirs during probate. A failure to account for all the relevant financial holdings could result in a probate court categorizing company assets as part of your estate and distributing them among your heirs, according to the state’s intestacy rules.

If you are confused about the relationship between these aspects, a seasoned lawyer could further explain how Mount Laurel probate affects business succession. A dedicated legal representative could provide more information about the relevant laws and help draft estate planning documents that account for all your valuable assets. Contact the office today to schedule a consultation.