Kent area residents who own their own businesses are proud of what they have grown and cultivated. These businesses are the result of a family's hard work, and keeping them going after the owner has passed away is important.
Planning for a business succession is important. Without a plan, the business could go into bankruptcy and never recover. Creating an estate plan for a business is a way for a business to prevent this from happening and ensure it will continue for many decades to come. A business plan can help a business transition from one generation to another. For example, an estate plan can give an option for a buy-sell agreement. This is a good strategy for those businesses that have multiple owners and can allow the other owners to buy out a deceased owner's interest. It can also prevent the beneficiaries of the deceased owner from becoming unintentional owners.
Another benefit of an estate plan for businesses is to reduce taxes. Business assets can be transferred to an owner's children and a trust can be established. The trust can help shield a business from high taxes when a business appreciates in the future. A business estate plan can also help create a succession plan for the business. The succession plan can set up a plan for who will be in charge of the business in the future, along with other important business strategies.
Not having a plan in place for when the business owner retires or dies can lead to the end of the business. Estate planning can help business owners create a plan for their business to ensure it remains successful for many generations.
Source: tgdaily.com, "5 ways estate planning benefits businesses", Feb. 5, 2018