Estate planning is important for everyone, but it is especially important for business owners. Not having an estate plan in place can cause big problems for your business and your family.
Estate Planning Can Avoid Probate
If a business owner dies without an estate plan, the business will go through probate. This means a timely judicial process which can stall and hurt operations, costing your company, employees and beneficiaries. Also, new ownership will be determined by the court, a decision which may not be in alignment with your wishes or the welfare of the company. Sometimes, the courts will divide company ownership between multiple family members, causing further strain upon company operations. A thorough estate plan can avoid probate and ensures your exact wishes for ownership succession. An estate plan can not only designate ownership, but can also designate who will actually manage the company if not the inheriting owner.
Estate Planning Can Minimize Taxes
There is a second major benefit to estate planning for business owners. Proper planning can help minimize estate taxes, especially if the combination of your personal and business assets exceeds tax exemptions. In the latter case, keep in mind that current tax exemptions are set to be cut in half come 2026. Proper estate planning can also help shield the estate from some commercial debt. Reducing both tax and debtor expenses can significantly boost an estate’s value for beneficiaries and assist your business’s financial health.
Your Estate Lawyer Can Help
Estate planning tools used to accomplish these goals include some combination of wills, trusts, business titling and buy/sell agreements. If you own a business, I highly encourage you to seek out an estate planning attorney to establish an estate plan. Also, if you have an estate plan, but it hasn’t been reviewed in several years, it might likewise be wise to consult an estate lawyer to ensure your estate plan is up to date with current laws and business strategy.
Contact us and let’s talk about how we can help your family plan for your future.