Should Estate Plan with Various Businesses and Beneficiaries Include a Trust?
I’m 65, collecting Social Security, own a condo, and own a building in which I operate a restaurant. The restaurant pays rent to an LLC of which I’m the sole owner. I have a will in place that has a friend as beneficiary. My questions: If I get married, will I have to do codicil to will? And could I split up items between people? I.e., the restaurant, the condo, the building? Also the building has a loan, will that pass through to my heirs? Finally, should I think about a trust right now?
The answer to all your questions is “yes”. If you get married, you should update your estate plan and you should consider a prenuptial agreement. Your spouse will have certain legal rights under state law. You can augment them through your estate plan or limit them through a prenuptial agreement. In either case, it’s best for you to put your plan in place yourself rather than depend on state law.
You can split any asset among more than one beneficiary including your business, your condo and the building. The SBA loan will survive your death and will have to be repaid from your estate. However, if it exceeds the value of your estate, your heirs won’t have to come up with the difference.
I would definitely recommend considering a trust. It’s a great vehicle for owning and managing your various assets and for splitting them among several beneficiaries. If it made sense, even after your death your restaurant and building could remain in trust with the net profits from their operation being distributed to the beneficiaries.