Most families say they wouldn’t trade the benefits of their family owned business for anything. While they agree it might be more stressful, the thought of earning a living and providing for the future needs of their family is found in just one place.
There are a few obstacles that come with the estate planning efforts. It’s easy to lay the formalities aside because your employees are family members in many cases, but once you explore what that really means in the long run, you might wish to rethink the casual approach.
Estate planning, especially for family owned businesses, is absolutely crucial if you want it to be passed down through the generations. Proper estate planning affords many financial tools designed to meet your objectives. The right estate planning lawyer can steer you in the right direction.
It’s not unusual for a client to approach estate planning with the mindset that the family knows exactly what he wants after he’s gone. Many believe because their family was right there with them each day in an effort of growing that business, they understand what should and shouldn’t be done. The fact is, it is rare for this type of scenario to play out. Families find themselves struggling to not only grieve the loss of a loved one, but they’re trying to pick up the pieces in a very difficult time. It comes as no surprise, then, that family members begin to disagree and the business suffers.
Have you considered a dynasty trust? These planning tools put into place protections for not only the next generation, but protections for your grandchildren and even your great grandchildren. While most of us leave our assets to our children, there are times when protecting future generations is an important goal. With a dynasty trust, you’re able to distribute those assets well into your family tree. Your financial planning lawyer will work with you as you provide the details when the trust is created. You’ll want decide how much is left to those generations while also finding protection against creditors, divorce or other life events.
A dynasty trust offers many advantages. As mentioned, it’s a way to keep your estate taxes lower while also finding
protection from creditors. In most states, you can go as deep into your future family tree as you wish. They’re versatile too. You can pair your life insurance policies with your dynasty trust for even better opportunities for those future generations. Your legal representation can provide guidance.
Did you know that most family businesses don’t survive a generational transition? Often, it’s because business owners devote most of their life to making a company profitable in the present, but do nothing to ensure its success for the future. It’s about far more than naming names; it should require extensive training in all things related to finances, state and federal laws, tax laws and other inner workings.
There are more planning tools that can help ensure your hard work is enjoyed by future generations. To explore your options, we invite you to contact our team of Vermont estate planning lawyers.
Ellen LaPlante
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