Estate Planning for Massachusetts Biotech Investors, Executives & Founders

As a biotech investor, executive, or company founder in the Cambridge, MA area, planning your estate involves some unique practical and legal considerations. From ensuring business continuity to protecting your valuable intellectual property (IP), as you work through the estate planning process it will be crucial to address all of the traditional and non-traditional factors involved.

Building an estate plan is a highly-personalized process that starts with identifying the assets you need to protect, and then transitions to choosing the most favorable way to achieve your goals while providing sufficient flexibility to make changes over time. At a high level, the key steps involved in protecting your personal, business, and IP assets include:

1. Identifying Your Personal Assets

What assets comprise your estate? While this is a fundamental question for estate planning, many people (estate planning attorneys included) do not give due consideration to the process of identifying the assets that need to be protected.

For individuals in the biotech industry, developing a comprehensive list of assets will often require a careful review of contracts and company documentation. As a company founder, what assets do you own personally, and what assets belong to your company? As an inventor or engineer, what IP rights have you retained, and what rights have you licensed or transferred away? As an investor, what is the value of your equity stake in the company?

2. Structuring a Comprehensive Estate Plan

Once you identify your assets, then you can begin the process of structuring your estate plan. When planning your estate, the key is to be entirely comprehensive. Any assets you overlook could fall outside of your plan; and, even if they fall within a catch-all provision in your plan, they could create a variety of undesirable consequences.

The tools you need to incorporate into your estate plan will depend upon your personal, financial, and family circumstances. They will also depend on your estate planning goals. Generally speaking, some of the most-common estate planning tools used to structure comprehensive plans include:

• Durable powers of attorney
• Health care proxies
• Wills
• Revocable living trusts
• Irrevocable life insurance trusts (ILITs)
• Generation-skipping trusts (or “dynasty trusts”)
• Business succession documentation
• Charitable trusts and foundations

3. Addressing Specialized Considerations During the Estate Planning Process

For biotech investors, executives, and company founders, the types of special considerations discussed above should take center stage during the estate planning process. As an investor or founder, your intangible assets could potentially make up the majority of the value of your estate. As a company owner and executive, you will likely want to ensure (as much as possible) that posthumous changes in the company’s operations, products, or culture will not diminish the value of your transferred wealth. These types of concerns can – and should – be addressed during the estate planning process; and, if your estate plan has the potential to trigger estate, gift, or generation-skipping transfer (GST) tax liability, it will be important to explore the exemptions and tax-specific strategies that are available.

4. Addressing Non-Property-Related Considerations

Finally, when preparing your estate plan, it is also important to give due consideration to the non-property-related aspects of the estate planning process. Here, we are primarily talking about planning for the event of incapacity. If you become physically or mentally incapacitated, who will make healthcare decisions for you? Who will manage your finances and investments? Who will take control of your company? There is much more to estate planning than distributing your assets after death, and making sure you address all of the relevant issues will be critical to protecting yourself and your family.

Time Is of The Essence – Speak with an Estate Planning Lawyer in Cambridge, MA

Do you have questions about preparing an estate plan? Are you concerned that your estate plan may be inadequate? If so, we encourage you to get in touch.

Biotech founders, executives, and investors often have the misconception that it is better to put together an estate plan once the company is more successful or on the verge of being sold. However, there are actions that can be taken now to plan for tax reduction that you may miss out on if you delay in putting together a plan. You can protect more of your estate by starting to plan sooner, rather than later. To schedule a confidential initial consultation at our law offices in Cambridge, MA, please call (855) 743-3136 or request an appointment online today.