Emotions are natural for all human beings. However, emotions can also cloud one's judgment when making important decisions. This can be a problem when it comes to estate planning for California business owners. Therefore, it is best to keep one's emotions in check when making business estate planning decisions.
Family-owned businesses can cause emotional responses when an owner dies suddenly without a detailed estate plan. The confusion can leave hurt feelings between children who were involved in the business and children who were uninvolved. Even a will can be contested when a family feels a recently deceased owner of a business was incompetent at the time of a will's signing.
Unfortunately, problems with emotional responses do not only occur with family-owned businesses. Closely held businesses may have some similar dynamics that can result in conflict following the death of an owner. This may come in the form of disputes between the remaining owners and the decedent's survivors over the value of the company. A surviving spouse may believe that he or she is not receiving a fair payout from the remaining owners of the closely held company.
Therefore, no matter what type of business a person owns in California, it is best to make sure to communicate one's estate planning decisions to his or her family, friends and business partners. However, before one does this, it is necessary to decide upon a particular estate planning strategy. Not all estate plans for business owners are the same, and each should be customized to fit individual circumstances.
Source: Forbes, "Don't Be So Emotional: Drama-Free Business Estate Planning", Steve Parrish, November 9, 2015