In follow up to yesterday's post, I wanted to provide the general estate planning principle regarding debts. Creditors can proceed against the estate to collect their debts. Debts and taxes must be paid out of the estate (or be otherwise provided for) prior to distribution of assets to beneficiaries. Therefore, it is important in any business venture to determine what exposure your venture may have on your personal estate as oppose to your business entity. You want to make sure that you separate the exposure of your business venture from your personal assets. The following are important steps to take:
1. Make sure business ventures are done in the name of your business operation.
2. Make sure your business has been properly capitalized and is in compliance with all legal requirement to assure its viability.
3. Make sure you have assessed risks in your business ventures and provided adequate insurance where your business assets might not be sufficient to cover potential exposure.
ABOVE ALL, ALWAYS seek professional advise and make sure your business succeesion planning is up to date. Leave your comments and questions here or contact us at www.ythlaw.com
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