Yes. If you have a "family business," then likely it is an important "member" of your family and an asset at the same time.
Consequently, plan accordingly.
A recent article in Forbes, titled “Most Family Business Owners Should Update Their Estate Plans,” included an international survey of 336 middle-market family businesses.
It seems more than 90% of family members who are senior executives with equity in the firms have estate plans.
So far, so good.
Only 22% of these estate plans have been updated within the last two years.
But it gets worse.
Only about 25% of them have been updated between two and five years ago, and the rest—almost half—have not been reviewed in over five years.
Most estate plans become “old” after a few years.
Call it "entropy" for estate plans.
They, like everything else in creation, are subject to that Second Law of Thermodynamics.
Laws change, family dynamics change, net worth changes, everything changes.
In fact, no man steps in the same river twice.
To cut to the chase, think of a regular review of your estate plan for your business kind of like your annual physical examination,.
You are not going through the process because you have developed a health problem since you last examination. You are going through the process because you ailing to regularly may have developed a problem.
On the other hand, instead of "problems" you may discover new "opportunities" for your business and, in turn, for your loved ones.
In some situations, there may be ways to improve the financials of the business and provide economic benefits to the family at the same time.
Be sure to consult with an experienced estate planning attorney who stays current on the latest developments.
Remember: “An ounce of prevention is worth a pound of cure.” When making your financial, tax and estate plans, do not go it alone. Be sure to engage competent professional counsel.
For more information about estate planning in Overland Park, KS (and throughout the rest of Kansas and Missouri), visit our estate planning website and be sure to subscribe to our complimentary estate planning e-newsletter while you are there.
Reference: Forbes (September 15, 2015) “Most Family Business Owners Should Update Their Estate Plans”