Preparing for the future of our families and loved ones after we are gone can be a very difficult experience. For those who plan to pass down the family business, the matter of protecting your assets can be particularly delicate. It takes a lot more than just telling Junior that the business will be his one day…it takes planning and legal advice to make sure that both Junior and the business are protected. If you are thinking of passing your business on to your loved ones, one of our Business Succession Planning attorneys at Lovenberg & Associates can help you decide the best way to protect your assets and family. There are a number of ways to legally pass down the family business to the next generation. Let’s look at a few.
Stating It In Your Will
In most states a person’s assets… including estate, money, and business, will be divided according to state laws unless that person has a legal written will describing exactly how they want their assets to be divided. This means that if you do not make it known in a will (or by some other legal business succession planning) who you want your business to go to, the state will get to decide. By putting it in your will, you will remain in control of the business until your death. If you do not feel a need to remain in control of the business, but would rather give some or all control to your kids, there are a couple of other business succession planning methods you can use.
Give It To Them Before You Die
If you want your kids to be a part of the business now, you could give them some or all of it before you die. Of course, they will have to pay taxes on a gift that large, but the business will be in good hands as they learn the ropes of making it work. This will help to avoid the estate tax which would be included should they inherit the business at your death. An experienced business succession planning attorney, such as the ones we have at Lovenberg & Associates can help you accomplish this while keeping tax issues at a minimal.
Sell It To Them
Of course, some may not wish to give the business to their kids, and might choose instead to sell it to them. This enables you to continue receiving income from the business for as long as you live. There are several different ways to sell your business to your kids…even to kids whose own assets may prevent them from being able to pay fair market price or pay it all at once. One of our business succession planning lawyers can go over all of the ways to sell your business to your kids while protecting both it and them…and you can still earn an income from it.
Transfer it to a Trust
By transferring your business to a trust, you can decide who it is passed down to even after you are gone. With this method, even in the event of your death, the business and your kids will be protected from creditors or ex spouses. There are many ways to do this, and many different types of trust that a business can be transferred to. Give us a call today and we can help take care of all of your business succession planning needs.