Estate Planning for Your Small Business: Protecting Real Assets and Real Property

When you’re running a small business, the day-to-day responsibilities can make it easy to postpone estate planning. But if you’re a business owner in Florida, it’s crucial to ask: What will happen to your company, assets, and real property if something happens to you? Without a clear plan, your legacy and your loved ones could be left dealing with unnecessary delays, probate complications, and even business failure.

This article explains how proactive estate planning can protect your business, ensure continuity, and provide peace of mind.

What Happens to a Business When the Owner Passes Away?

In Florida, if a sole business owner passes away without an estate plan, their ownership interest becomes part of the probate estate. This means:

• Business assets may be frozen while the court appoints a personal representative.
• Operations could be delayed or halted.
• Family members may lack legal authority to step in.
• Valuable contracts or client relationships may be lost.

In the absence of succession planning, the future of the business becomes uncertain, especially if real estate or physical assets are involved.

Essential Documents for Business Owners

Whether you operate a sole proprietorship, LLC, or corporation, every business owner should have a legally sound estate plan that includes the following:

Revocable Living Trust

A revocable living trust can hold your ownership interest in the business. This allows for seamless transfer upon your death and avoids the need for probate.

Business Succession Plan

This outlines who will take over the company, under what conditions, and how assets and responsibilities are transferred.

Operating Agreement or Shareholder Agreement

For LLCs or corporations, this can include provisions on what happens to an ownership interest if a member passes away.

Durable Power of Attorney

Appoints someone to handle business matters if you become incapacitated.

Pour-Over Will

This ensures any assets not already in your trust are “poured over” into it at the time of death, including overlooked business items.

Planning for Real Estate Holdings

If your business owns real estate, such as a storefront, office building, or rental property, it should be addressed separately:

• LLC Ownership: Many business owners title property under an LLC for liability protection. It’s important that your estate plan coordinates with the LLC’s operating agreement to transfer ownership smoothly.
• Trust Ownership: Real property can also be titled in the name of a trust, which may help simplify estate administration and offer centralized management during incapacity or after death.
• Homestead Considerations: In Florida, certain real estate (like homestead property) is subject to specific inheritance rules. An attorney with experience in estate planning in Venice can help ensure compliance.
  

Don’t Let Probate Stall Your Business

Without proper planning, real property and business assets may get tied up in probate. Florida’s probate process can delay operations and place a financial strain on heirs, employees, and partners.

Scenarios we often see include:

• Business bank accounts that can’t be accessed.
• Commercial leases that can’t be transferred or renegotiated.
• Rental income on real property that gets delayed while waiting for court authorization.

Fortunately, structuring your estate with trusts, beneficiary designations, and proper titling can avoid many of these issues. If your business or real estate is owned solely in your name, it’s time to take action.

Consult an Estate Planning Attorney

Every business and family is different. The right estate plan considers:

• Your business structure
• Real estate holdings
• Key stakeholders
• Tax implications
• Long-term goals for your company and loved ones

You don’t have to figure it out alone. Schedule a consultation with Bart Scovill, PLC, to discuss your options to safeguard your company and property with business succession planning and estate documents tailored to your needs.

Your business is your legacy; protect it with smart estate planning.

This blog post is for general informational purposes only and does not constitute legal advice. Reading this article or contacting our office does not create an attorney-client relationship. Every legal situation is unique; you should consult with a qualified attorney regarding your individual circumstances. Nothing in this article should be considered tax advice. Our office does not provide tax advice, and you should consult with a qualified tax professional before taking any action that may have tax consequences.