Estate plans are not just for individuals; they are also important in business, especially for small family-owned companies. If you and your family worked hard to build your business, you want to ensure it is protected. Our estate lawyer in Raleigh NC can help by offering a few tips on how to do this.
Estate Planning Tips| Estate Lawyer in Raleigh NC
Having an estate plan in place can also avoid confusion about roles once the head of the business has passed away or is no longer able to run the business. It is also helpful in planning for taxes.
Let’s take a look at a few tips from our estate lawyer in Raleigh NC for estate planning for a small family-owned business.
- Have a succession plan in place.
When the head of the business is no longer around to run the business, who will take over? Having roles for each member of the company outlined, including successors, can help create a smooth transition and avoid problems that could harm the business. Any stakeholders in the business may also need to be informed of the plan so that they can understand who will be handling each aspect of the business.
- Plan for the close of business.
If you plan to end your family business after you are no longer able to run it, you will need a plan in place to liquidate your assets and distribute them. A lawyer can help you draft a plan that will minimize the risk of surviving family members having to pay estate taxes on a business that no longer exists.
3. Reduce tax liability.
If your personal assets are tied up in your business, you may need to protect your family from unnecessary business related taxes that could reduce their inheritance. If you plan to have the business continue without you, having a plan that protects them may reduce the risk of them having to sell the business in order to pay taxes on it.
- Consider a buy-sell agreement.
If your company has multiple owners, you may benefit more from a buy-sell agreement. This agreement allows a co-owner to be bought out if he or she decides not to continue on with the business. It will also establish a sale price for each share of the business. If your heirs do not want to continue to run the business, they can sell their part to the other owners under this agreement.
- Think about life insurance.
Businesses with multiple owners sometimes get life insurance policies naming each other as beneficiaries. In the case of the death of one of the owners, the other can use the funds from the policy to buy out that share of the company, if the family decides to sell it. This helps in cases where the remaining owners do not have the finances to purchase the other share.
There are many complex issues surrounding small business owners. Working with an estate lawyer in Raleigh NC who has experience in estate planning can help ensure that you are making the right decisions for the business you and your family worked so hard to build. Call Klish and Eldreth to make an appointment with an estate planning lawyer today.