If you own a small business in Virginia, you’ve likely invested significant time and effort into building it and want to ensure its protection. One effective way to safeguard your company is by establishing a trust.
A trust enables you to manage your assets in a manner that benefits both you and your family. It also allows you to plan for the future, ensuring that a trusted individual handles your business according to your instructions if you become unable to do so.
How a trust protects your business
A trust offers substantial protection for your company’s assets. When you place your business into a trust, that trust legally owns the company, while you retain the ability to manage it. This structure shields your business from potential creditors or legal issues that may arise in the future. It also ensures your company passes to the individuals you choose when you can no longer run it.
In addition, setting up a trust can help your family bypass probate. Probate is often a costly and lengthy process, but assets within a trust are exempt. This means your business can continue operating without unnecessary delays or expenses, sparing your family the stress of court proceedings.
Selecting the right type of trust
Choosing the right trust depends on your specific goals and your family’s needs. The two primary types of trusts are revocable and irrevocable.
A revocable trust offers flexibility, allowing you to make adjustments or dissolve the trust if necessary. In contrast, an irrevocable trust provides stronger asset protection, but once you establish it, no one can alter or revoke it.
Although setting up a trust requires some additional effort, the long-term benefits are worth it. By planning ahead, you can protect your business and ensure it remains operational, even in unforeseen circumstances.
