Burlington estate planning attorneys can provide assistance to business owners who want to pass their companies onto their children. A business should be a proud legacy that you can pass on to future generations so the company can survive for decades to come. Unfortunately, many business owners don’t make the right business succession plans so their companies are lost when the owner has to leave the company during his lifetime or when the owner passes away.
Unsworth LaPlante, PLLC can help to make sure your business is kept safe and secure even if something happens to you. We have worked with many business owners with companies of all different sizes to ensure that their organizations are able to pass seamlessly to new owners and survive for a long time after the original owner is gone. You should give us a call as soon as possible if you don’t already have a business succession plan in place so our Burlington estate planning attorneys can help you to create a strategy that works for transferring your business. You never know when something could happen to you, so don’t leave your company unprotected.
How You Can Pass a Business Onto Your Children
The first decision you will need to make is whether you want to transfer ownership of your company to your children during your lifetime or after your death. If you transfer your company while you are still alive, you will need to make a plan to avoid trigger gift taxes. If you transfer your company after you pass away, you will need to consider how to avoid estate tax.
Estate taxes are charged on larger estates, and if the value of your ownership interest in the company, business assets and personal assets is large enough to trigger estate tax, then all of the property you wish to transfer to your children could end up being taxed. In some cases, family businesses have been lost because there weren’t enough liquid assets to pay the estate tax due as a result of so much of an estate’s value being tied up in the business. Heirs or beneficiaries have also been forced to take out costly loans if they want to try to keep the company while paying estate tax.
There are a number of different strategies for trying to transfer a company without trigger taxes. One option, for example, is to create a family limited partnership and transfer an ownership interest in the partnership to your children over time during the course of your lifetime. Some families will also incorporate a family business and transfer ownership shares, either directly or through the use of trusts or other estate planning tools.
You should also consider any potential risk to your business organization that could result from your incapacity, and should make certain that your business is able to quickly transfer to new owners upon your death or departure so there is no period of uncertainty when it is unclear who is in charge of managing the business organization.
If you become sick or infirm due to aging and you cannot continue to live on your own, your business could be at risk of being lost due to the high costs of nursing home care or long term care at home. You cannot get most private insurance or Medicare to pay for routine nursing home care, and Medicaid – which is usually the only source of third party payments for a nursing home – will not pay for your care unless you have impoverished yourself. If you don’t want to be put in a position where you might have to sell your company or its assets to afford nursing home care, you should work with an estate planning lawyer to try to protect your company.
Your business is also at risk if it must transfer during a lengthy probate process, because it could take many months before new owners are able to take control over the company. A proper estate plan will allow you to avoid this undesirable delay.
Getting Help from Burlington Estate Planning Attorneys
Burlington estate planning attorneys at Unsworth LaPlante, PLLC are here to help you to be proactive in creating a business succession plan that will protect your company during your lifetime or after you have passed on. To find out more about the ways in which our legal team can assist you with the business planning process, join us for a free seminar. You can also give us a call at (802) 879-7133 or contact us online to get personalized advice on how to hand your company down to the next generation.
Latest posts by Stephen Unsworth (see all)
- Charitable Giving Can Punctuate Your Legacy - August 14, 2019
- Is Joint Tenancy a Good Inheritance Planning Solution? - July 31, 2019
- Census Report: Burlington Senior Population Exceeds National Average - June 28, 2019