So, should your family business be coordinated with your estate plan? [I just love writing rhetorical questions.]
Would you be surprised to learn that family businesses comprise more than 70 percent of global productivity?
Would you be surprised to know that many owners of those family businesses are woefully behind when it comes to keeping their estate planning current?
By the way, the answer is "yes" to both of these questions.
In fact, a recent article in Money Times, titled “Updating estate plans need of the hour for family business owners,” warns that estate planning becomes old or outdated after few years.
In addition, family situations and relationships between family members, business matters, net worth, and other factors will change anytime ... and certainly over a period of time.
Consequently, you need to have an estate planning review of your plan on a regular basis. Regardless how complex an estate plan is, it is better to work on a customized estate plan now than have it all fall apart later.
Proper, current estate planning will help ensure that your family business passes from one generation to the next without disputes that may further damage its possible growth or existence.
Oh, not likely to keep the business in the family?
Estate planning can also be used to offload the family business at a profit, instead of at a crash-and-burn fire sale price.
According to the original article, many family business owners are unaware of charitable planning and charitable gifts—more than 50% of family business owners are not even exploring these options and their tax benefits.
Because the tax laws change frequently, family business owners need to work with their estate planning attorneys and take advantage of any new strategies to legally avoid estate taxes, gift taxes and other taxes.
Not surprisingly, after speaking with their estate planning attorney, some family business owners find themselves richer than they thought.
Estate planning is critical for the inheritance to control the assets and minimize the potential taxes imposed by the federal government.
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: Money Times (September 18, 2015) “Updating estate plans need of the hour for family business owners”