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.To learn more, visit http://www.elderlawnewyork.com/