Whether it’s a farm or a manufacturing facility, family businesses are a key part of the global economy. Family business owners are not always very good about keeping their estate plans up to date. Circumstances change: the value of the business may grow or shrink, relationships within the family may change, and tax laws change. Failing to update the family business’s estate plan can lead to financial disaster. Legacies built up for generations can come apart in the span of one generation when planning is not done properly or kept up-to-date.
Estate plans, no matter how well prepared, become out-of-date over the course of time, according to Money Times, “Updating estate plans need of the hour for family business owners.” A plan that was outstanding when it is done is often undone by changes in relationships among family members, changes to the tax law or even dramatic shifts in the business world.
That’s why you need to have an estate plan review on a regular basis. Regardless how complex an estate plan is, it's better to work on a customized estate plan now. This will make certain that your family business passes from one generation to the next without disputes that may further damage its possible growth. In the alternative, estate planning can also be used to offload the family business at a fair price deal.
Many family business owners aren’t aware of charitable planning and charitable gifts. More than 50% of family business owners aren’t exploring these options and their tax benefits.
Because the tax laws change frequently, family business owners need to work with their estate planning attorneys and take advantage of any new strategies to legally avoid estate taxes, gift taxes and other taxes.
After speaking with an attorney, some family business owners find that they're richer than they thought once their estate plan is drawn up. Estate planning is critical for the inheritance to control the assets and minimize the tax imposed by both your state and the federal government.
Talk with a qualified and experienced estate planning attorney so you are placing your business in the best possible condition when you pass it to the next generation.
Reference: Money Times (September 18, 2015) “Updating estate plans need of the hour for family business owners”