Creating and building a successful business is an incredibly difficult undertaking – and maintaining that success is usually even more challenging. Protecting that success, however, is a different story entirely. You must consider what will happen if you die or become incapacitated, if your business will be subjected to estate taxes once you pass away, or even how your business will operate – and who will operate it – once you’re gone. Any Westlake Village trust lawyer will tell you, without plans for any of these possibilities, the business that you worked on from the ground up may collapse if something should happen to you.
Here are some things you should consider as a business owner when it comes to estate planning:
- You can plan for an easy transition
An estate plan allows you to specify your wishes about what happens to your business after you pass away. For instance, if you have partners or co-owners, you can decide to sell your portion to them rather than burden your children who may not want to operate the business. A buy-sell agreement with your business partners could put a plan in place where they agree to buy out your share of the business upon your death.
- Give your business life beyond you
Estate planning ensures that the company you worked so hard to create can survive long after your death. Many large companies in America started off as small family businesses – yet they only survived through the second or third generation of the family because of poor planning on the part of the original business owner.
- Minimize your tax expenses
You can pass along your business assets safely to your heirs through trusts, agreements, and other legal constructs while minimizing the amount of taxes that will be owed after your passing. Without this advanced planning, your business may be subject to unnecessary taxes – which are oftentimes very high – that could force the sale or liquidation of company assets in the event of your incapacity or death.
- Create a business succession plan
Successful business owners know what it takes to run the day-to-day operations of their company. That’s why it’s not surprising that many businesses fail after the transition to a next-generation family member or a new owner who does not have the skills or business savvy of the founder. A proper succession plan, however, assures that your business is in the right hands by legally selecting whom you want to lead your company when you are eventually unable, or when you simply want to retire.
If you’d like to learn more about how estate planning can impact your business, or if you’d like to have an experienced Westlake Village trust lawyer review your estate plan and business succession plan, please call (805) 409-3878 to set up an initial consultation.