For those with family owned businesses, farms, ranches and even landowners, the challenges are many and the statistics are a bit concerning. Did you know that 70 percent of all family businesses simply will not survive the transition to the next generation? Seventy percent of those that will make that transition will do so in the next 15 years. The biggest problem with family owned businesses is the estate tax; however, there are many other questions and problems that plague family business owners and for many, they are unsure of where to turn to protect what they’ve worked for their entire lives.
The unique legal challenges can be overwhelming when it comes to family owned businesses. There’s often as much sentimentality as there are legal and financial considerations. It all has a place in these dynamics, but without proper estate planning, a family stands to lose all of it.
Estate taxes aren’t the only costs that threaten assets as they’re passed from one generation to the next. Probate fees and other settlement expenses can significantly reduce an owner’s legacy. On top of that are the problems surrounding the fair distribution of those assets to heirs.
As most family farm and ranch owners can attest, the typical farm family is land rich, cash poor. With hundreds of thousands, if not millions, of dollars invested in equipment, livestock, structures and land, the net worth may be impressive. But when you look at the cash flow, it’s another story entirely. Because estate taxes are based on the current market value of all those assets, if your heirs are unable to come up with the cash from other sources, they may have no recourse but to sell the farm just to pay estate taxes and other settlement costs. It doesn’t have to be that way.
Estate Planning Solutions
Your farm or business poses two primary estate planning challenges:
- How the business can preserved so that it can pass to the next generation safely; and
- How those assets will be equitably distributed to your heirs
It’s achievable; however, it does require advance planning, especially when it comes to estate taxes. There are legal strategies that can be implemented that will ensure you maintain control over who, how and when the ownership transfers. Our team of estate planning lawyers know the intricate laws and how to make the most of your assets so that you’re better able to protect your loved ones during that transition.
Essex Junction Vermont Family-Owned Businesses & Farms Legal Advice and Guidance
We invite you to explore our digital library where you’ll find more information on business planning and asset protection strategies for Essex Junction Vermont family owned businesses & farms. Be sure to contact us to schedule your complimentary consultation. Our experienced estate planning lawyers will work with you to explore what your options are and can recommend the best planning strategies.