Part 2 of a 2-Part Series
Last week, we started a two-part series about Estate Planning for Restauranteurs. Click here to read that post.This week, we conclude the series with part 2.
Consider a pour-over will and revocable living trust
If restauranteurs transfer ownership of your restaurant to a revocable living trust during your lifetime, you retain full control of the business. Just don’t forget to name yourself as the trustee. Also, designate a successor trustee to take over if you fall ill or pass away. Manage the trust property and make distributions to beneficiaries you name. The pour-over transfers any property not transferred to your trust prior to your death when you die. This helps if you forget to transfer your restaurant to the revocable living trust.
Business Licenses and Permits for Restauranteurs
- Change the name on record.
Restauranteurs operating as sole proprietors? When you die, business assets transfer to a successor who operates as a new business. But, your successor changes the name of record on all licenses, permits, and registrations. However, is your restaurant a separate legal entity? If so, it exists even if you pass away. Therefore, you need not amend the business licenses and permits. - What about your liquor license?
Obviously, not all restaurant owners hold liquor licenses. But some do. Consider special items so the business passes on to your successor. The transfer of a liquor license is more complex than other transfers of money or property belonging to the business owner. The personal representative may retain the liquor license. But upon renewal, the new owner should obtain a liquor license in his or her name. - Other Considerations
State law may require the new restaurant to meet certain legal requirements to hold a liquor license. This may involve a lengthy process involving a transfer application, a criminal background check, fees, and other measures designed to ensure regulatory compliance. Make sure your successor could hold a liquor license by the issuing state agency. Many state agencies require disclosure of all of the owners (or members in the case of an LLC. This could cause additional complications. Or, they may require the successor to take certain steps for transfer of ownership. Some states place restrictions or limitations on trust ownership of license-holding businesses. Discuss these considerations with your estate planning attorney.
Add Estate Planning to Your Menu
When you work twice the hours of the average person, you likely struggle to find the time to do anything else! However, for the continuation of your restaurant business and peace of mind, put successor plans in place. Your family, business partners and employees will thank you. Help them avoid the headaches (and possibly heartaches) incurred if you failing to plan in advance. Call today to set up a meeting. We can help you design an estate and business succession plan to best address your particular circumstances.
About Skvarna Law Firm in Glendora and Upland, California
Skvarna Law Firm operates offices in Glendora and Upland, California. We provide legal services. We cover San Bernardino, Los Angeles, Orange and Riverside Counties. This includes several cities. Upland, Ontario, Rancho Cucamonga, Fontana, Colton, Rialto, Chino, Chino Hills, Glendora, Claremont, Pomona, La Verne, Montclair, San Dimas, Azusa, Covina, West Covina, Diamond Bar, Walnut, La Puente, Corona, Norco & Mira Loma. Visit SkvarnaLaw.com to learn more.
