As a small business owner, one of the most important considerations to make will be how you will plan for your business in the long run. You will have a variety of decisions to make. Whether you are looking to see the business you have created make it long after your passing, or would like to close up shop, it’s important that you carefully plan for the long run with an estate planning lawyer. While estate planning for a small business can seem fairly straightforward, working with a lawyer can help to ensure that you have taken the proper steps towards creating a solid, well thought out estate plan. Here are some steps that may be helpful for small business owners creating an estate plan:
Step 1: Create Your Will
When beginning the estate planning process, the best place to start is by developing your will. A will is a document that allows you to clearly outline how you would like your assets to be dispersed. This will include assets such as: ownership of your business, property and financial accounts. It’s also important that you identify an executor who will be responsible for distributing your assets and resolving your estate when the time comes.
Step 2: Consider Tax Implications
When engaged in the estate planning, one of the primary things you will be considering is how you will be able to maximize the inheritance of your beneficiaries. An estate planning lawyer can advise you regarding state and federal taxes that can help your loved ones to retain as much of the assets they have inherited. For a small business, your loved ones may be required to pay up to 50% in taxes. Because many businesses do not have this level of liquidity, many beneficiaries must sell the business in order to cover the estate taxes. However, it’s important to be aware that your lawyer may be able to advise you of certain tax breaks that your small business may be able to benefit from.
Step 3: Have a Business Succession Plan
Whether you have plans to retire or are planning for your business when you no longer living, it’s important that you ensure a smooth transition for your business. This can help your business to continue operating seamlessly when your business changes hands.
Step 4: Have Conversations with Loved Ones
When planning for the future of your small business, it’s essential that you have conversations with your family. You will want to know where your children and family members stand when it comes to your business. Additionally, having conversations with loved ones can mitigate the risk of conflict occurring.
Are you a small business owner? Whether your business is a fairly new venture, or a family business that you have owned for a number of years, it can be easy to put off the process of estate planning. However, it’s important to note that by engaging in this process you can provide yourself and your loved ones with peace of mind in knowing that you have a clear plan for when the time comes. Don’t delay this process any longer, contact an estate planning lawyer for the guidance you deserve.
Contact an estate planning lawyer for more information.