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Can I Put My Business Into A Trust

January 1, 2026

trust lawyer Seymour, TN

You can absolutely put your business into a trust. Many business owners do this as part of their estate planning, and it’s often a smart move. Whether you own a sole proprietorship, partnership interest, LLC membership, or corporate shares, these assets can typically be transferred into either a revocable or irrevocable trust. The process protects your business from probate and gives you more control over what happens to your company if you become incapacitated or pass away. At Carpenter & Lewis PLLC, we help business owners understand how trust planning works for their specific situation.

What Are The Benefits Of Putting My Business In A Trust?

There are real advantages to putting your business into a trust. First, you avoid probate delays that could seriously disrupt business operations. Nobody wants their company stuck in court proceedings for months while customers and employees wonder what’s happening. Here’s what else you get:

  • Privacy protection for your business ownership and succession plans
  • Seamless continuity if you can’t manage the company anymore
  • Distribution control so heirs don’t get everything at once
  • Management structure preservation during ownership transitions

Without a trust, your business interests go through probate after your death. That means court oversight, public records, and potential delays that could hurt your company’s operations and value. It’s not pretty.

What Types Of Businesses Can Be Transferred Into A Trust?

Most business structures work well with trust ownership. Sole proprietorships? They transfer easily since you own all the assets directly. LLC membership interests typically transfer without major complications, though you’ll want to check your operating agreement first. Some agreements have restrictions you need to know about. Partnership interests can go into a trust, but your partnership agreement may require partner approval. Corporate stock usually transfers smoothly. S corporations are trickier because they have special rules about eligible shareholders, so you need to make sure your trust qualifies under IRS regulations.

Should I Use A Revocable Or Irrevocable Trust For My Business?

A revocable living trust gives you flexibility. You maintain complete control over your business. You can modify the trust anytime, and you continue managing operations as usual. This option works well if your main goal is avoiding probate and planning for incapacity. The downside? Your business assets remain part of your taxable estate. An irrevocable trust removes the business from your estate, which can reduce estate taxes for high-value companies. But there’s a tradeoff. You give up direct control and can’t easily change the terms later. A Seymour trust lawyer can help you weigh these options based on your specific circumstances.

What Complications Might I Face When Transferring My Business?

Transferring your business isn’t always straightforward, and you need to know what you’re getting into. Operating agreements and partnership documents may restrict transfers or require approval from other owners. It’s frustrating, but it happens more often than you’d think. Some business licenses and permits don’t transfer automatically to a trust. Financing agreements might have due-on-transfer clauses that need lender consent. You don’t want to accidentally trigger a loan default because you didn’t check these details first. S corporation status has strict shareholder requirements under federal tax law. Your trust must be a qualified Subchapter S trust or an electing small business trust to maintain that status. Getting this wrong could cost you significant tax benefits, and that’s not something you can fix easily after the fact.

What’s Involved In The Transfer Process?

The transfer process depends on your business structure. For sole proprietorships, you’ll transfer individual business assets like equipment, inventory, and accounts receivable into the trust. It’s fairly straightforward but requires attention to detail. LLCs and partnerships require amending ownership records and possibly updating operating agreements. Corporate stock transfers involve endorsing share certificates and updating the stock ledger. You’ll also need to notify relevant parties like banks, vendors, and potentially clients, depending on your business type. Working with a Seymour trust lawyer helps you handle these technical requirements correctly and avoid disrupting your business operations. We’ve seen too many business owners try to do this themselves and create problems that take months to untangle.

Do I Need Professional Help With This Process?

Putting your business into a trust involves both legal and practical considerations that affect your company’s daily operations and long-term future. The right approach depends on your business structure, ownership arrangements, tax situation, and estate planning goals. Don’t try to navigate this alone. Getting professional advice upfront prevents costly mistakes and makes sure your business protection strategy actually works when your family needs it most.