Protecting the future of your estate and its assets establishes the financial wellbeing of you and your loved ones. It requires the use of a wide range of estate planning strategies.
But this process is even more complex for business owners who want to stabilize and maximize the value of their businesses before their death.
Your business represents a significant portion of your wealth, and passing its value on to others after your death can provide many benefits to your family and loved ones.
Working with an expert estate planning attorney protects your business and other assets in your estate.
Business Planning Challenges
Without the right estate planning resources, the value of your business can be greatly reduced when it comes time to transfer its ownership or management.
This is especially true when business owners fail to implement any plans that protect them in cases of disability or death.
Business owners who attempt to implement an estate plan on their own can be overwhelmed by the complexity that businesses present.
In order to stabilize and maximize the value of your business, you need to consider the legal and tax issues that can arise.
Life insurance, health care needs, federal and state taxes, the eligibility of beneficiaries, and other factors must all be included in your estate plan.
An estate planning attorney can give you the clarity you need on these and other issues so that you’re fully aware of your legal and financial rights.
Death taxes can be applied to all business assets including partnership interests, ownership, and corporate stock.
Inheritance and estate taxes can also be applied, which can further reduce the value of your estate for your beneficiaries.
Estate tax laws are always changing, and having the best legal resources keeps you current on the latest estate planning rules while maximizing the value of your assets.
Death and estate taxes often come with restricted time frames within which the estate must pay them. This can result in the sale of business assets at a reduced market price in order to satisfy outstanding debts.
This negatively impacts beneficiaries who depend on the future income generated from your business or plan to continue managing its operations after you’re gone.
Transferring the Value of Your Business
If heirs plan to continue managing your business after you’re gone, you’ll need to minimize potential tax burdens while allowing for the liquidity needed to cover costs related to your estate’s settlement.
Choosing the right executor for your estate is one of the first steps in securing the financial future for your business and beneficiaries.
Don’t choose an executor who isn’t familiar with your business or who may become unnecessarily involved in its management if you don’t want them to be.
Many business owners choose a business associate, accountant, or other professional to serve as their executor.
This allows the estate to be overseen by someone who is qualified to address the unique needs of your business while addressing any issues that might arise.
The executor should be able to exercise authority over your business operations through Power of Attorney while being exempt from any liability related to local fiduciary laws.
Business assets can be separated from non-business assets. This may be useful in designating different individuals to make decisions related to both in order to further protect your business and the beneficiaries of your estate.
There are many considerations that you need to make, and planning for the transfer of your business can be complicated if you don’t know what to look for.
Your estate planning attorney can help you identify the best options for your business and estate planning needs.
Protecting your business assets and maximizing their value provide greater security to you and your beneficiaries while helping you establish a lasting legacy for future generations.