Is your estate planning up to date?
The unfortunate truth of life is that the unexpected can strike without warning. In that case, have you ever thought what will happen to your business that had taken you years to establish? If a proprietor has a sudden demise, the government can levy a death tax or an estate tax on his business. This can bring down the worth of that business by as much as 50 percent.
With good estate planning in place, your business can be protected from losing a significant amount of its equity in the event of unforeseen circumstances. Systematic estate planning can insulate your life from your business and lower the hassles that may be faced by others soon after your death. Here are some of the ways to do proper estate planning that can lead to improvement of your business.
It offers an assurance that your business will have a long life
It takes several years to build up a good brand. It is the dream of every brand to be visible for years to come. No matter, what the size of the business is, they would dream to pass on their strategies and innovative ideas to their subsequent generations so that their legacies can survive for years to come. Renowned brands such as Coca-Cola, Wal-Mart and McDonald have successfully to be profitable even after cut-throat competition as there had been a proper estate planning done by them. If businesses fail to take this factor into consideration, they would often end up struggling in the event of a sudden death of owners or an owner. Organizations with a strong management leadership will be able to continue with the functioning of a business though the owners have passed away.
Good estate planning will offer greater range of options for a business
When your business has a good estate planning in place, there is an option called buy-sell agreement. If there is one or multiple co-owners in your business, the aim of a buy-sell agreement is to make sure that in the event of the death of any of the owners, the deceased’s interest is automatically bought by the remaining co-owners. The deceased owner’s beneficiaries cannot become owners unintentionally in such cases.
Such an agreement would be immensely helpful in reducing the damage that may otherwise happen after the deceased owner or co-owner’s death,
Proper estate planning can be helpful in minimizing taxes
Since you are an owner of a successful business, you would be capable of transferring the assets of your business to your children. It is also possible to establish a GRAT or grantor retained annuity trust so that an option of income is available for you.
The function of this trust is to make sure that as the business assets of your company appreciate over a period of time, the increase in value and equity of a business could be saved from overwhelming taxes.
Estate planning can help in creating a proper succession plan for the organization
Proper estate planning will ensure the preservation of your business and keep it running according to your specific directives. Thus, when good estate planning is in place, it also means that you are planning for who will be at the helming your firm and leading the business in your absence. A reputed law firm can actually help you to prepare and implement your estate planning in a proper and systematic manner. Any attorney or lawyer who represents such a firm is a specialist and will know how to cater to your specific planning requirements.
The offices of Debra G Simms are located in Volusia County, Port Orange, New Smyrna Beach, Daytona and the surrounding areas.