Estate Planning for Tech Professionals
A Conversation with Estate Planning Attorney Patricia De Fonte, Esq. A collaboration
Who has authority to step in? Will your family inherit your ownership interest without going through probate? And what happens if your business partner dies?
At De Fonte Law PC, we help California business owners protect their families, plan for incapacity, and address what happens to their business ownership interests when life takes an unexpected turn.
Your business may be one of your most valuable assets and an important source of financial security for your family.
But business ownership raises questions that go beyond preparing a living trust.
Your estate plan should address:
A revocable living trust can help avoid probate of properly transferred business interests and establish who will manage trust assets during incapacity.
But creating a trust does not automatically transfer your business ownership into it.
Nor does naming a successor trustee necessarily give that person authority to run the business.
The type of business matters.
An LLC operating agreement may restrict transfers or management rights.
A corporation may have shareholder agreements or tax restrictions.
A partnership agreement may determine what happens when an owner dies.
For sole proprietors, individual business assets and contracts must be evaluated because the business is not a separate legal entity.
We help business owners understand how their ownership interests fit into their personal estate plans and coordinate with business counsel when necessary.
Listing an entity on a trust asset schedule does not necessarily complete the transfer of your membership interest.
Marriage and community property ownership do not automatically confer business management authority.
Your trust may leave your interest to your children while your operating agreement restricts transfers or gives other owners purchase rights.
Proper maintenance, separation of business and personal finances, and appropriate insurance matter. That annual filing with the California Secretary of State does not provide asset protection.
Their spouse, children, or trust may inherit economic rights in the business. Does your business partner have their affairs in order?
Managing a family trust is different from managing a business interest. Your trustee may need appropriate authority and professional assistance.
Imagine you own a successful business and are unexpectedly hospitalized.
Who can deal with the bank? Authorize payroll?
Communicate with employees and vendors?
Exercise your ownership rights?
Your spouse may understand the business but lack the legal authority to act.
A thoughtful incapacity plan may include:
Business continuity also requires practical planning for access to records, banking, contracts, and essential operations.
The goal is to ensure the right person has the right authority when it is needed.
For many California business owners, transferring an ownership interest into a revocable living trust can help avoid probate. But the transfer must be completed correctly.
An LLC is a separate legal entity. Transferring your membership interest into your trust is different from transferring the LLC’s underlying assets.
Before transferring a business interest, consider:
Transfers involving S corporations require additional attention to shareholder eligibility. LLCs owning California real estate may raise property-tax reporting or reassessment questions.
We coordinate with business attorneys and other advisors when specialized review is needed.
We have worked with clients who owned vacation rental properties through LLCs and believed that forming the LLC provided all the asset protection they needed.
That assumption can be dangerous.
An LLC generally provides protection against certain business liabilities, but it does not eliminate every risk. Personal guarantees, an owner’s own conduct, and other circumstances may create personal exposure.
We encourage clients to review:
Forming an LLC is only the beginning. The actions you take afterward help preserve its protections.
Imagine you and a friend have operated a business together for 20 years.
Your partner dies unexpectedly.
Does their spouse inherit their interest? What about their children?
Can you purchase that interest? How will its value be determined?
Depending on the operating agreement, their beneficiaries may acquire economic rights in the business, while management rights may be subject to restrictions.
You chose your business partner. But did you choose the person who might succeed to their interest?
We refer clients to experienced business attorneys who can review operating agreements, buy-sell arrangements, and business succession provisions.
A revocable living trust may help avoid probate of a properly transferred LLC membership interest and provide for its administration during incapacity or after death. Whether a trust is appropriate depends on your circumstances.
Often, yes. But the operating agreement must be reviewed, the transfer properly documented, and any applicable restrictions addressed. Economic rights and management rights may be
treated differently.
The LLC does not necessarily terminate. However, questions may arise about succession to the membership interest, management authority, and whether probate is required.
Not automatically. Authority depends on the entity structure, governing documents, and existing legal authorizations.
Possibly. An individually owned business interest may require probate or another legal transfer procedure. Proper trust funding may help avoid probate.
Yes, subject to ownership restrictions and the rights of other parties. Your estate plan can address different distributions, valuation considerations, and family circumstances.
A trustee may have authority to sell a trust-owned business interest, subject to the trust terms and applicable restrictions. Selling an ownership interest is different from selling the entity’s underlying assets.
No. An LLC generally provides limited liability for certain business obligations, but personal guarantees, personal wrongdoing, and other circumstances may create personal exposure.
An operating agreement may contain enforceable transfer restrictions or purchase rights that affect the disposition of your ownership interest. The documents should be reviewed together.
Divorce may affect the characterization, ownership, and disposition of business interests. California community property rules and restrictions during divorce proceedings may apply.
Review them after significant changes, including adding a partner, purchasing property, refinancing, changing entity structure, selling a business, or experiencing major family changes.
No. Our practice focuses on California estate planning. We refer clients to qualified business attorneys when business agreements require preparation or revision.
We’ve worked with Patricia and her team for several years now and I’m always impressed by their level of detail and streamlined process. They create a customized experience that helped us think through our estate plan from a financial, emotional, and legal perspective. I would highly recommend working with Patricia!
Abby S.
My wife and I enjoyed working with Nadya at DeFonte Law to create our trust. The firm’s approach was very easy for someone with limited legal and financial experience. They helped us thoroughly account for what we needed to protect out assets and family members while still keeping the process focused and timely.
Eric S.
Working with Wendy on my estate planning with De Fonte Law was a real gift. She is kind, compassionate and patient. It took extra time for me due to multiple injuries and setbacks and I found her to be very understanding and encouraging. It is a big relief to have this major undertaking close to completion. Thank you Wendy!
Susanne K.
A Conversation with Estate Planning Attorney Patricia De Fonte, Esq. A collaboration
With tax time behind us, it presents a golden opportunity to ensure
Estate planning is not filling out a form, entering information into a
When a client tells us they own a business, we ask three questions:
Did you work with a business attorney, use an online service, or prepare the documents yourself?
Has a knowledgeable insurance professional reviewed your coverage and the risks associated with your business?
What happens if you become incapacitated, die, or lose a business partner?
We ask these questions because estate planning should go beyond preparing technically proficient documents.
We regularly introduce clients to experienced business attorneys, insurance professionals, CPAs, and financial advisors when additional expertise is needed.
We want your estate plan to reflect your family, your finances, your business, and your priorities.
That is Estate Planning With Heart®.
Book a complimentary 20-minute discovery call to learn whether De Fonte Law PC is the right fit for your estate planning needs.