Jensen Law Office, PLLC
1833 N 105th St., Suite 301
Seattle, WA 98133
Jensen Law Office
September Client Newsletter
Handling S Corporation Interests in Estate Planning:
Electing Small Business Trusts and Qualified Subchapter S Trusts
One of the many challenges of owning a small business is determining the appropriate tax classification of the business. When an individual owns a business entity that is classified either entirely or partially as an S corporation, it is important to seek the guidance of an experienced estate planning attorney and tax advisor when planning for death. Depending on your estate planning goals, the advice provided by these professionals may be very different from the advice given to another business owner.
Can a Trust Own My Business after I Die?
In general, the answer to the title question is yes, your trust can own your business after you die. However, there are a number of considerations that may impact the answer to this and the following questions. One consideration is the type of business interest you own. Is your business a limited liability company (LLC), a partnership, a corporation, or a sole proprietorship? Another consideration is how your business is managed. Is your business managed as an LLC, a partnership, or a corporation?
Successor Trustee Compensation
Asking someone to serve as your fiduciary (trustee of your trust or personal representative or executor under your last will and testament) is not something that you should take lightly. Serving as a fiduciary is a heavy responsibility that requires significant time and effort. If you plan to nominate a family member or friend to serve in one or both of these roles, you will need to consider whether you should authorize them to be compensated from the trust or estate for the services they provide to the trust beneficiaries or heirs of the estate.