Littman Krooks Estate Planning Attorneys Suggest Preparing For The Best Business Legacy
White Plains, NY (Law Firm Newswire) September 6, 2013 - A family-owned business is a hard-won commodity and considered a legacy to be passed on to the next generation.
However, that legacy can be lost in the transition from one generation to the next; more than 70 percent of family-owned businesses do not successfully survive the transfer. Estate planning specialists say that business owners may wish to develop a transition plan with an estate planning attorney to ensure the business makes it to their children intact upon their retirement or death.
How can business owners ensure their plans for the future are successful? They should work with an estate planning attorney to develop a living trust or will. They should speak with all involved family members about their intentions for the business and establish a business succession plan in order to transfer the control and ownership, including any in-laws and additional non-blood relatives, if they are involved with aspects of the business or can offer a different perspective.
The business succession plan may include detailed plans in order to preserve and enhance what is commonly known as the “institutional memory” so that any branding or legacy reputation stays intact. Also noted should be who actually owns the business, what advisers are on board to help with the ownership transition, who is in charge of the day-to-day business activities, what provisions have been put into place for the heirs not actively involved in the business, and what training or educational steps should be taken by newly involved family members and key employees.
Other things to discuss with an estate planning attorney: plans to ensure that the business has access to a significant cash flow in order to pay estate taxes or purchase the shares of the company held by the deceased; compensation, supervision and training for employed family members; and an established buy-sell agreement in place for the possible future sale of company shares or partnerships.
While retaining control over a hard-built business is attractive, even in later years, the best thing someone can do to truly ensure that one's legacy and investment continues is to put solid estate plans into place.
New York Contact:
Maria M. Brill
Littman Krooks LLP
New York City Office
655 Third Avenue, 20th Floor
New York, New York 10017
(212) 490-2020 Phone
399 Knollwood Road
White Plains, New York 10603
(914) 684-2100 Phone
300 Westage Business Center Drive, Suite 400
Fishkill, NY 12524
(845) 896-1106 Phone
- Changes To Medicare Part D: What To Look For
During Medicare Open Enrollment, which lasts from October 15 until December 7, beneficiaries can join or switch Medicare Part D prescription drug plans. It is a good idea to review your plan during this time, because Part D plans can change how much you have to pay and what is covered, and you may want […]
- Proposed FINRA Rules Will Help Prevent Financial Elder Abuse
Under new rule proposals soon to be released by the Financial Industry Regulatory Authority (FINRA), financial advisers would be able to delay disbursing funds from the accounts of senior investors if they believe financial elder abuse may be taking place. One of the proposed rules would allow financial advisers to wait up to 15 days […]
- How a Succession Plan for a Family Business Fits Into Your Estate Plan
When a family business is transferred to the next generation, careful planning and proper timing are essential. The succession plan should take into account interest rates, taxes and the effect that the transfer may have on one’s estate plan. One factor that family business owners should take into consideration is interest rates. The importance of […]