Coordinated Counsel
Don’t Let Your Business Go Through Probate
Transcript
BARRY:
So, I guess the next thing on the list is bold– You know, we talked about it already: businesses going through probate. It is a no-no. It is a big no-no. You are going to waste a lot of money, you are going to disrupt your business flow and get the wrong people in control. You are going to have valuation issues that are going to be fought over by the various parties.
I forgot to mention something in the last thing about challenging. You mentioned how do they know? How do they do it? So, I mentioned the arguments of undue influence, lack of capacity, invalid execution. I forgot to mention, these people are generally required to get notice. That whole due process thing. So, you have to tell them. You have to say, “Here is the will you got cut out of. Here you go. Go find your attorney. I will hear from you in 20 days.”
So, you have to tell them. But do you? Maybe not. If it’s a will, and it’s in an estate, they have to get notice. If it’s a trust, which is private, and if it’s done right, it’s executed before death, it’s called an inter vivos trust, it’s a lifetime trust, and you cut someone out, there is no notice requirement to give– There is no requirement to give notice to the person who is cut out in a trust like there is in an estate. So, that’s one interesting thing about the notice.
CHAD:
Unless it is a surviving spouse, right?
BARRY:
Well, yeah. If you cut out your spouse and go back to the thing I just mentioned about–
CHAD:
Sorry, I am terrifying everyone listening.
BARRY:
You go backwards. Yeah, so, you know, there is that. And there is also another interesting thing. If you do a trust– You know, you’re a young guy. You pass away in 70 years from now and you have a trust, every transaction that you have done during your lifetime after that trust was created, but before you pass away, it is like reinforcing your capacity, reinforcing your intent. You are not just waiting until death and the death court toll booth to challenge your capacity. To challenge your influence and your intentions. Like you’ve been doing that this whole time. And that’s an important factor that I think is–
CHAD:
While we are talking about trust, something came to mind. I saw this happen with a client. Let’s say someone creates a trust, but they never actually transfer anything into the trust. What happens then in terms of, you know–
BARRY:
Happens all the time. A lot of attorneys, they just get– “Here are your docs, get the hell out of my office.” They don’t help you marshal assets over to the trust. Sometimes it is intentional and strategic. But basically, if you don’t fund the trust, it’s going to go through probate. And usually you have what is called a pour over will, where the will says, “Everything that is in my name still, send it over to the trust.” So everything goes to the trust. Everything goes to the trust.
But that happens in probate. So you’re still going through probate, but hopefully the pour over will says, “Go to the trust.” The worst thing you can have is you have this awesome trust, really well thought out, but nothing in it. And no pour over will. No will. And you have an estate that goes this way, and a trust that goes this way that has nothing in it. I mean, that is kind of like the worst thing. So I would not do that.
Why Business Owners Need a Succession Plan — Not Just an Estate Plan
By: Barry E. Haimo, Esq.
March 26, 2026
Many business owners understand the importance of having an estate plan. They create a will, and perhaps a trust, then just assume their assets will transfer smoothly when the time comes.
But for entrepreneurs, professionals, and family business owners, estate planning alone is rarely enough. What is often missing is a clear business succession plan.
A succession plan focuses specifically on the future of the business. It addresses who will run it, who will own it, and how decisions will be made if the current owner becomes incapacitated or passes away. Without these answers clearly documented in advance, even a successful company can face serious disruption.
Ownership and Control Are Not the Same
One of the most common misunderstandings business owners have is assuming that ownership automatically determines who will control the business. In reality, ownership and management are two separate issues.
For example, a founder might want their spouse or children to inherit the financial benefits of the company while leaving day-to-day leadership to a partner or trusted executive. Without a structured plan, however, those distinctions can quickly blur. Beneficiaries may suddenly find themselves responsible for decisions they are not prepared to make, while experienced managers may lack the authority needed to keep operations running smoothly.
A well-designed succession plan clearly separates these roles and ensures that the right people are empowered to make the right decisions.
Protecting the Business During Unexpected Events
Succession planning is not only about what happens after death. Incapacity can present just as many challenges for a business.
If the owner becomes unable to work due to illness or injury, contracts still need to be signed, payroll must continue, and strategic decisions cannot wait indefinitely. Without documents that designate who can step in and act on behalf of the business, operations may stall at exactly the moment stability is most important.
Planning ahead allows the business to continue functioning without interruption and prevents confusion among employees, partners, and vendors.
Preventing Internal Disputes
Businesses often represent a significant portion of a family’s wealth. That financial value can create tension if expectations are not clearly established in advance.
A succession plan can address issues such as voting rights, ownership transfers, buy-sell arrangements between partners, and procedures for resolving disagreements. By documenting these decisions while relationships are strong and intentions are clear, business owners reduce the risk of conflict later.
The goal is not only to protect financial value but also to preserve the relationships that made the business successful in the first place.
Planning Today Protects Tomorrow
Building a business requires years of effort, risk, and dedication. Yet many owners spend far less time planning for what will happen when they are no longer at the helm.
A thoughtful succession plan ensures that the business can continue operating, supporting employees, and serving customers — even during periods of transition. It also gives owners confidence that the legacy they have built will remain stable long after they step away.
For business owners, estate planning is an important first step. But succession planning is what truly safeguards the future of the company. Get started putting together a succession plan for your business by reaching out today.
And if you’re interested in getting all of your advisors on the same page, get in touch with Kinnect Financial.
