Don’t Bet the Family Business on No Estate Plan
Being the owner of a family business can complicate your personal estate planning, since no doubt much of the wealth you want to pass on to your heirs is tied up in the business. Being able to do so in a tax-advantaged way – and in a way that won’t cause a family feud – is one of the best reasons you should be talking with a lawyer about a business succession or exit plan as part of your own estate plan.
Even if you don’t have to pass on as much as the Waltons (Walmart), the Fords or the Murdochs, you do need to plan for what you have. Here are some things you should be considering:
- How to handle not only the death of a family business owner, but also his or her possible disability, incapacity, bankruptcy or retirement. The owner needs to not only think of the impact on the business for any of these events or circumstances but also on his/her family, both now and in the future.
- Do your heirs want to continue to run the business without you? If so, a business succession plan needs to be put into place. If you transfer family business assets to the next generation before you die, you will be able to lower estate and gift taxes. If not, then an exit strategy for selling the business and divvying up the proceeds would be a necessary task.
Remember not having a plan is a plan… just a really bad one. Not taking steps to provide instruction and cover a variety of circumstances will in the best case result in unnecessary expense for the business you built and your loved ones, and in the worst case mean the end of your business.
If you’re a small business owner, call us today at 720-248-7621 to schedule an Initial Estate Planning Session to ensure that your estate plan takes into account your business needs.
