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Estate planning for business owners

Conversations about estate planning are often directed towards older Americans-who are nearer retirement. However, it is important for a person of any age to consider estate planning. Advance planning for how one's estate will be managed is especially important if a person has an extensive amount of assets.

Fashion designer Tory Burch's experiences with divorce and her business explain why it is so important to have a plan when it comes to managing one's assets. Tory Burch began her very profitable company, Tory Burch LLC, with her husband. When they divorced several years later, in 2006, her former husband remained on the board of the company, though he was not very involved in the daily workings of the company.

Her husband went on to open several of his own companies, but both Tory and her husband maintained ownership of Tory Burch LLC. Since then, various legal issues have arisen for Tory Burch LLC, including halting counterfeiting operations in China.

Most recently, however, Tory Burch's former husband was asked by the company to leave his position as co-chair of Tory Burch LLC. In addition, her former husband opened a retail company, C. Wonder, last year that sells products which closely resemble those sold by Tory Burch LLC. Even the design of C. Wonder stores is allegedly similar to that of Tory Burch LLC.

Tory Burch's successful company has encountered a variety of legal issues. Her story makes an important point about estate planning though. Ms. Burch holds a significant amount of assets. She earned some of these assets before she and her former husband divorced. However, as her former husband has also been tied into her business, she would want to make sure that her estate plan has been updated to account for her divorce and the growth of her company.

Source: Forbes, "Why Tory Burch should be fashion's next billionaire (and how her ex could stop her)," Clare O'Connor, Nov. 26, 2012

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