Knowing how to handle their assets is difficult when a spouse passes on. If they owned the business or worked there, many questions arise, should the spouse’s share of the company be sold? Should it be passed down to children?
Many people wonder whether they need a probate lawyer before selling an asset that belonged to their spouse. However, in most cases, probate is not required. It typically begins 30-90 days after the testator dies, depending on which state the incumbent belonged to. Regardless of whether you need a probate, you will undoubtedly want the business assets to be transferred over as smoothly as possible.
Here’s how you can ensure protecting and preserving your spouse’s business assets after his or her death:
Table of Contents
Assessing the Situation
The first step in protecting your business assets after the death of your spouse is to identify them. You’ll want to know what you have, who it will be, and how it can be protected from creditors.
- Assets: Make a list of all the property owned by either spouse individually or jointly with others. Remember that assets not titled in their name may still be subject to probate laws if used for personal purposes such as buying groceries or paying bills.
- Beneficiaries: Next, determine who will inherit those assets upon death. Also, figure out whether they will receive them outright or through a trust arrangement created by the deceased party.
- Executors: Next, identify any executors named in wills or trusts responsible for liquidating such assets should anyone need access during probate proceedings. These individuals should also be aware of any beneficiary designations their clients make. This is because some states require executors’ approval before distributing funds from certain accounts like 401(k)s or IRAs. Employees can make a maximum contribution of $22,500 to their 401(k) account. So based on how many years your spouse has worked, a considerable amount can be added to such an account.
- Heirs: Finally, consider whether distant family members might become involved in disputes over ownership rights.
Once your spouse dies, you may also have to go through various legal processes before acquiring and protecting his or her business assets.
- Make sure that the will is valid. If it isn’t, the estate will be divided according to state law. If there is no will, it will be divided according to state law. For instance, in Texas, the court considers if the property is a community property acquired by both spouses jointly or separately in case one dies intestate.
You may also wish to consider appointing an executor instead of leaving this task up to probate courts in case anything goes wrong with your documents or those filed by someone else who would inherit after you die.
- You may need an additional step if minor children are involved in this situation, especially if they live with you. This step is getting guardianship over them before their other parent dies so that both parents can agree on who gets custody of these kids during their minority period.
Financial planning is also essential for new widows or widowers. Financial planning can help ensure that any assets are protected and preserved following the death of a spouse or partner.
The financial planners can help you decide how to move forward with the business, manage personal and business finances, and continue being financially independent. This can be extremely crucial if your spouse was the breadwinner of the house.
Many professional financial advisors specialize in working with widows. You can take help from these individuals. You must look for advisors who have spent several years offering financial planning for widows. You can also ask for qualifications and certifications from a particular advisor in the widowed community.
Another crucial consideration is the fee structure. According to Widowed Community, there are two types of fee structures, fee-only and fees + commission. In the fee-only structure, the financial advisor won’t ask for any commission, which will benefit you.
Business Continuity Strategies
You should also develop a business continuity plan, which is a document that outlines how your company will continue operating following the death of a spouse. The plan should include:
- A list of critical functions must be performed for your company to operate. For example, if you run an auto shop and your husband is responsible for all customer service calls, finding someone else to take over when he passes away would be critical for maintaining operations at the shop.
- An emergency contact list with phone numbers and email addresses so family members can reach each other quickly if needed during an emergency where they might not have access to other forms of communication such as landlines or cell towers;
Communication and Collaboration
One of the most critical steps to take following the death of a spouse is communicating with everyone involved. You must keep your employees up-to-date on what’s happening and answer any questions they may have about their jobs or paychecks during this difficult time. You should also be sure to communicate with customers about any changes in business operations that may occur due to the death of your spouse.
It’s also crucial for you and your family members to collaborate on how best to handle communication with creditors, suppliers, and other third parties. This will help them understand the situation and decide why they should continue your business.
Emotional Support and Self-Care
After the death of a spouse, many people find it helpful to turn to friends and family for emotional support. But those not used to relying on others may find this problematic.
Self-care is also vital in helping you cope with grief. Self-care activities include getting enough sleep, eating healthy foods, and exercising regularly. If these types of activities sound overwhelming right now, try taking small steps toward them by making sure you get out of bed in the morning or drink some water during the day instead of soda or coffee drinks that contain caffeine.
Caffeine should be avoided during such times so you can sleep properly. Challenging times like this can disrupt your sleep cycle due to grief, leading to insomnia. In fact, data shows that insomnia is very common in the US. According to The American Journal of Managed Care, at least 30-40% of US adults suffer from insomnia annually. The goal here is to start doing something good for yourself!
While losing a spouse is difficult for any business owner, some steps can be taken to help ensure the company’s future success. By understanding how probate works and planning, you can protect your business from unnecessary complications during this time. Having a financial advisor by your side here to know how the asset transaction works will be helpful.