Death and Taxes: Legacy Planning for Business Owners

Death and taxes are the only two things that are certain in life. This week, I’ve been knee deep in both.

The deadline to file taxes for S and C corps, partnerships, etc was September 16. I am happy to report all S Corps that hired me for taxes were filed before that date.

Death. I went face to face with that on Thursday evening. After discussing my experiences hiking in the French Alps the summer of 2002 with my first husband (who happened to be French) during my morning workout, I took to Google to see whatever happened to my first husband. We were 19, dumb, and married and divorced within a 2 year period.

Turns out, he passed away in 2022 at the age of 39. His party hard lifestyle had eventually caught up with him, and his liver failed. This is devastating, and I spent Friday hunting down his family because he had left behind a book of family photos that sort of just lived with the box of my family photos. I found his sister and sent those back.

Sitting here at 41 as an entrepreneur, wife, mother to a child with special needs, real estate investor, and overall money expert – I realized that I need to make sure my affairs are on lock. Here’s the plan I’m setting up for myself. If you want to set something up for yourself similar, let me know.

1. Revocable Living Trust: my RLT will help my loved ones avoid probate. I will work with a law firm to set this up, then make sure all my assets are funneled through this. This trust is ignored for tax purposes, and does NOT provide asset protection.
2. Life insurance: I’m making sure my term life insurance policy death benefits will be paid to my revocable living trust.
3. Making sure I do not mix operating entities with passive income entities: I have already done this naturally, but it’s worth pointing out that you should have LLCs for your real estate assets that are separate from your small business LLCs.
4. Making sure other important documents are on lock: I expect my estate attorney will recommend a simple will, advanced directives, and powers of attorneys to be planned out in advanced of my death or disability.

One of the things that I love most about being a CPA is the intersection between accounting and law. Estate planning, when properly executed, pays off in the long run. It is something that I discuss with all my clients, and “walk the talk” on myself.

Need to work with a CPA who looks at your life situation holistically, and helps you think through topics like your estate plan? Head to www.myabundantia.com/contact and let’s set up a time to chat.