Schedule A Consultation Today 425-333-2358

Helping You Plan Your Future And Solve Your Problems

View Our Practice Areas

Succession plans essential for Kent business owners

Many Kent business owners may hope and expect that ownership and operation of the family business will be passed on to children after retirement or in the event of death. While in some cases business interests will pass smoothly to children under default probate laws, a number of different factors can lead to unexpected and undesirable results. Business owners who take the time to establish a solid succession plan can enjoy greater certainty about the future of their businesses and potentially take advantage of opportunities to reduce inheritance tax liabilities at the same time.

By pairing instruments such as trusts or buyout agreements with life insurance policies, business owners can set the stage to pass on their assets to their preferred heirs. Failing to set up a succession plan can lead to potentially disturbing consequences.

One financial planning professional described a situation in which a business owner expected to continue working for a few years before retiring and handing the business over to his children. Unfortunately, the man died before he could sign over his interests and the entire business passed to his second wife. The wife proceeded to fire the man's two sons and turn the business over to her two children from a previous marriage.

One way to avoid this type of situation is to execute a buyout agreement that would obligate the surviving spouse to sell the business to designated heirs. The heirs would take out a life insurance policy on the business owner and use the proceeds to buy out the surviving spouse's interests. An extra layer of asset protection and a means to avoid probate can be added by conveying business interests into a trust and using trust-funded insurance proceeds to buy out the surviving spouse.

Business succession plans need to be carefully constructed in order to perform as desired. An experienced estate planning professional can help Washingtonians make sure that family businesses stay in the family.

Source: PlasticsNews.com, "Family biz needs succession plan," Kevin LaMont, Dec. 7, 2012

No Comments

Leave a comment
Comment Information

Make Your Consultation Appointment

To speak with an attorney at Gellner Law Group about estate planning, probate, trusts, wills or tax controversy, contact our law office in Kent, Washington, today. You can call 425-336-2908 or send us an email. We provide representation across the entire Seattle-Tacoma metropolitan area.

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close

Privacy Policy

Email Us

Kent Office
8407 S. 259th Street
Suite 203
Kent, WA 98030

Phone: 425-336-2908
Fax: 253-852-0400
Kent Law Office Map

Kent Office

Spokane Office
505 W. Riverside Avenue
Suite 500
Spokane, WA 99201

Phone: 425-336-2908
Fax: 509-769-0202
Map & Directions

Spokane Office