There are many reasons as to why you might want to start your own business. While challenging, there are also many pleasures that come with owning and operating your own business. One such pleasure may be knowing that the business you own and operate can lead to something wonderful for your loved ones – perhaps your family. However, one blind spot for business owners and operators that are completely immersed in the growth and success of their business regularly becomes: what happens to my business and my affairs once I’m no longer around?
A conversation regarding your will and estate planning strategy is one is beneficial to have with yourself, first and foremost, so that you take the time to reflect on what matters most to you and what you would most want to see if you could look upon your loved ones once you are no longer around. Conversations with loved ones and professionals such as lawyers and accountants should also be had to ensure that you have bolstered your will and estate planning strategy as much as possible.
One avenue that is very valuable to the estate planning of a business owner or operator is that of a corporate will – corporate wills are also known as secondary wills. A strong point of attraction for having a secondary will is that the second will may be able to avoid the probate requirement and therefore the estate administration tax.
For business owners in Ontario, the use of multiple wills was approved by a 1998 decision of an Ontario court. If your small business is structured as a corporation for example, the shares of your privately held corporation may not be subject to probate. This multiple wills strategy therefore allows you to separate your assets into two wills; your personal will and your business’ will. Depending on the size of your business, its assets and its earnings, the multiple will strategy can save you a significant amount of tax. Important to note is that this multiple wills strategy is not a DIY strategy. Drafting multiple wills can get rather complex, and not doing so correctly can jeopardize both your personal and business wills.
In addition to being aware of your options as regards multiple wills, being in a wills mindset should also include you thinking of some sort of roadmap that you will leave for loved ones. A roadmap is not necessarily something that is legally binding or that need be followed by your loved ones, but it can be something that reduces a great deal of inconvenience and frustration during an already challenging time for your loved ones. In terms of what a general roadmap for your business following your passing should include, you should be listing out general, or at the very least, most valuable accounts and assets, alongside greatest liabilities and concerns your business faces. Your roadmap can also include mention of what regular expenses and revenue looks like for your business, and what key decision makers should continue to be in place after your passing. Depending on your business, you might also want to make clear any IP your business possesses or owns, including trademarks, copyrights or trade secrets. Bank account information can be included in your roadmap. Ideally, the first time your loved ones have a look at your roadmap should not be after your passing – rather, the roadmap should be a point of honest conversation with loved ones, in a way that highlights responsibilities and mutual respect.
Graphene Business Law has experience and strong knowledge of wills. We are here to assist you in arranging your affairs in the most efficient and advantageous value-driven manner possible. For any wills and estate planning inquiries you may have, you may reach out to us at Graphene by filling out the booking tool on our web page graphenebusinesslaw.ca, or sending a direct inquiry to info@graphenebusinesslaw.ca . You may also text us at 647-466-5985.
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This blog post does not constitute legal advice, and does not create a solicitor-client relationship between author and reader. For inquiries, please contact Graphene via the above listed platforms.