Being a small business owner takes a lot of heart. For most entrepreneurs, it takes years of dedication and hard work just to get the business off the ground. Then it takes a lot of integrity and professionalism to make it an ongoing success. As your business grows, you feel the responsibility of making sure you are taking care of your employees and the business that provides their livelihood. Have you ever thought about what would happen if you were no longer around to take care of the business?
Estate planning for businesses is something that can easily be overlooked. But when you think about how much you have put into that business, how much your family depends on it, as well as the families of your employees, it’s worth thinking about what your estate plan should look like for your business. If you would like to know a few things to think about to protect your business in the case that you are no longer here to lead it, our business attorneys at Lake of the Ozarks have three important things to consider in this week's blog.
Who Will Run Your Business
If your spouse or your family members are not highly involved in the business, it may be impractical to think that they can step in and run the business in your stead. If you have partners, it may make more sense and be more feasible for them to continue the business. If you do not have partners, it’s important to think of who would be able to step in and take your place. Of course, you want to have a conversation with that person and make sure that they are in agreement. You also will need to prepare them for making that transition. Having access to online accounts, bank accounts, financial information, technical information about the business, etc. will be critical to your successor’s success. So creating that training for transition and a centralized place for all of that administrative information will be part of your state plan for your business
Who Will Own Your Business
If it does not look reasonable for your family or another individual to step up and take a leadership role, it may make more sense to sell the business. Having a plan in place to make that easy and you have information for valuation will be very helpful to your family. If you do have partners who are able to step into the leadership role, they may want to have the option of buying your portion of the business out. So your estate plan may include an option for that. A good way to be prepared in case that happens is for partners to take out life insurance policies on the other partners so that if one passes away there is financial funding to provide for that buyout. Then, instead of your family having to learn how to run the business and deal with that responsibility, they would receive money for your portion of the business instead.
Probate and Taxes
It might surprise you to know, but the death of an owner can sink a business just because of the estate tax burden that is incurred when the business is inherited by a family member. Sometimes families have no choice but to liquidate the business to cover the tax burden within the timeframe that is required. That is a terrible end for something you’ve spent so much of your heart and soul creating. We highly encourage you to speak to a business estate planning attorney at Lake of the Ozarks when it comes to your tax potential and find ways to give the business more time to pay that tax and hopefully avoid the pressure of a quick sale.
Gibbons Law Firm is Ready to Help!
If you are getting ready to start a business, or have a business and do not have an estate plan, we urge you to take advantage of a free consultation at Gibbons Law Firm. Our business attorneys in Lake Ozark are well equipped to help you with your business estate plan and ensure that your business is in the best position it can be if something were to happen to you. In fact, we are able to help you with all of your business legal needs, so if you have any questions whatsoever, feel free to ask! Give us a call at 573-348-2211 to schedule an appointment to speak with one of our estate planning attorneys in mid-Missouri. If you’d like to stay in touch with us and hear all of our legal tips and helpful information, be sure to follow us on social media using the links below.
Remember, your initial consultation with Gibbons Law Firm is always free.