According to an estate planning attorney from our friends at Silverman Law Office, PLLC, although estate plans are generally thought of as personal documents for those with large estates, just about everyone can benefit from having one in place. This includes young people and even those who do not have a lot of assets. Another group of people who should always have an estate plan in place is business owners. Learn more about why every business owner should have an estate plan, and how you can work toward putting one in place to protect your investments.
Business Ownership Can Lead to Hefty Tax Bills
Taxes and business usually go hand in hand. Death of the owner does not necessarily change this. In fact, even a small business can pull a hefty tax bill after its owner has passed away. The consequence of this is often a lengthy probate process and significant depletion of the estate. Heirs ultimately suffer from this, sometimes being forced to pay taxes as high as 55 percent on the business and estate and may even be forced to sell the business to settle the debt.
Trusts, Transfers, and Buy-Sell Agreements
There are numerous ways that business owners can protect their businesses with effective estate planning, but some of the most commonly used include trusts, transfers, and buy-sell agreements. Trusts allow you to transfer the business prior to your death while you continue to run it, a buy-sell agreement can help your heirs avoid the mess of haggling with a partner about price, and transfers to children or other heirs who are partners in the business can reduce the risk of estate freezes. Each option is used for a unique situation, and there are certain aspects that should be considered before implementing any one of these plans.
Getting Started with Your Estate Plan
Whether you have been running your own business for years or have only started to think about opening your own business, the assistance of an experienced estate planning attorney is crucial to the estate planning process. Not only are they able to ensure you understand how certain variables may impact your heirs and the future of your business, but they can also assist you in developing creative solutions to address or mitigate any of these special considerations. In addition to working with you on the business-related aspects of your estate plan, an experienced lawyer can also assist with your personal estate. This holistic approach can help ensure your heirs reap the most benefits.
Contact an Estate Planning Law Firm Today
Knowing your loved ones will be taken care of when you are no longer here provides great peace of mind. If you would like to learn more about the estate planning options and tools you may have, contact a seasoned estate planning attorney.