Frequently Asked Questions Estate Planning Succession Planning Probate

Frequently Asked Questions Estate Planning Succession Planning Probate

Frequently Asked Questions Estate Planning Succession Planning Probate

FAQ estate planning

Argentina FAQS Estate Probate Successions

Why is it important for a business owner to have an estate plan?

  • Transfers the business owners’ assets to family members
  • Provides a mechanism for the sale of the business if there are no family members interested in continuing the business
  • Helps avoid probate and
  • Depending on the value of the estate, a plan may significantly reduce estate taxes.

Is a Will enough for someone with a business?

As a matter of fact, a business owner should have more than a Will as it only provides guidance as to who will receive assets, including the business, but won’t avoid probate or help the business owner save estate taxes.

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How can a business owner save estate taxes? 

Frequently Asked Questions Estate Planning, Succession Planning Probate

In general, the estate tax system is confusing and we expect that the laws will be changing anytime soon in 2017.

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How do you calculate the value of an estate for estate tax purposes?

In fact, fair market value of all property is included in the estate as well as proceeds of life insurance and the value of retirement and pension plans. The value of the estate is then reduced by liabilities.

What if the estate isn’t large enough to trigger estate taxes?

First of all, use a trust instead of a Will as it helps maintain privacy upon death and avoid the expense of probate. If assets, including business assets, are transferred to a trust, upon death, they will pass to heirs without probate. If incapacitated a successor trustee will manage assets, so conservatorship proceedings are not needed. The trust benefits the creator during their lifetime.

Estate Planning Succession Argentina

Estate Planning Succession Argentina

If there are estate taxes, how do you provide for enough cash to pay the taxes without selling the business at a fire sale?

This is an important reason to do a well thought out estate plan. Indeed, there is a variety of tools used to protect the business and provide cash for estate tax payment.

There are two business owners who each own 50% of the business, what happens if one of them dies?

A buy-sell agreement provides for a buy-out of the ownership interest of the deceased shareholder. Thus, the structure of a buy-sell will depend on many factors unique to the situation. Many times, you may use life insurance to fund the purchase.

What happens upon retirement or disability of one of the 50% business owners?

In general, these cases can be very difficult. For example, if the departing owner is a key employee, it is necessary to replace their services. You may use buy-sell agreements, with appropriate methods for determining the value of an owner’s interest for a buy-out and, most importantly, how to fund the buy-out.

Are life insurance proceeds income taxable?

Generally, you may exclude life insurance, but if it lacks a correct structure, income taxes may apply to the proceeds. We recommend using an insurance agent.

These are such difficult economic times for business owners; can an estate plan protect a business owner from creditor’s claims?

No. Asset protection is different from estate planning, however, it can be done in conjunction with an estate plan. Certain entities can provide business owners with better protection against claims from personal as well as business creditors. One method is to structure entities as part of a gifting program.

Why is this a good time for someone with a larger estate to do an estate plan?

We anticipate that asset values will increase in the future. If you combine a gifting program with an estate plan, using today’s lower values, you may remove future appreciation from an estate to help minimize future estate taxes.

This process seems to involve many complications, where do I start?

Always start with the basics, which is a trust. A trust does not have to be overly complicated. It can range from standard to customized, depending on the personal circumstances. Many people procrastinate starting their estate plan because they don’t want to confront the subject of their eventual demise. Estate plans, health care directives and a power of attorney will help your family and business through an emotional and difficult time.

Frequently Asked Questions Estate Planning, Succession Planning Probate

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