Owning a business means being in charge of your family’s backbone. Your life revolves around it. Your family eats, plays, and goes to college because of it. Among your list of priorities, it’s one of the top items. So what are you doing to protect it in the event something were to happen to you?
Ensuring Continuity of a Family Business
If you think you really know someone, see how they react when faced with an inheritance dispute. If several family members are involved in your business venture, who will take over management if you suddenly pass away? Emotions are heightened after a family loss, and little things can lend themselves to big arguments. Imagine how bad it can get with something as important with running a family business. Have a plan regarding who will take over, who will manage, whether specific employees will remain in the business, allocate percentage of ownership, etc…
Buy-Sell Agreements if You Have Business Partners
If you have business partners, are they going to sell your interest to a third party? Would it go to your heirs? Is there a specific family member who could adequately take over your interest? If your portion is sold, what would be a fair price?
Protecting Personal Assets If You’re a Sole Proprietor
It’s a fact that most businesses have several types of debts. Corporations, Limited Liability Companies, and other types of business entities have ways to limit their business liability. But if you’re a sole proprietor and you die leaving behind business debts, debtor can come after the rest of your estate in their attempts to collect. So now that you’re alive and well, it is good business sense to look into carefully studying your life and liability insurance policies, as well as any existing business contracts.
Avoiding or Reducing Tax Liability
Although the state of Florida does not impose a tax liability on in heritances, regardless of which type of business you own, your heirs may be faced with federal taxes upon your passing. There are estate exemptions that apply, depending on the value of the inheritance. However, there is a death tax, property taxes, redeeming stocks, and filing taxes on “tax deferred” retirement plans.
Going through probate is a monumental headache, compounded by the pain of losing a loved one. There are ways of bypassing it completely, or to at the very least, mitigate some of the difficulties that go hand in hand with an entrepreneur passing away. As with everything related to businesses, every situation is different and what’s best for your specific business will depend on your specific circumstances. The only way to be best prepared is to consult with an experienced business law attorney. Hunter Business Law can help.