Attorney
As a small business owner in Contra Costa County, you’ve worked hard to build a successful business. As such, you may want to see your business continue long after you stop working and to provide the wealth you’ve created to your loved ones. Here’s how careful estate planning can help you achieve those objectives.
Protecting Your Business Assets
Estate planning tools can help small business owners protect their business assets in various ways. First, estate planning can help separate a business owner’s personal and business assets, which can protect the business from the owner’s liability, such as personal debts or a judgment in a lawsuit. Conversely, estate planning can also protect a business owner’s personal assets from liabilities that the business accrues. Estate planning can also help a business owner prepare for unexpected emergencies, such as disability or death, by ensuring the continuity of their business’s operations.
Business Succession Planning
One of the key aspects of estate planning that business owners should undertake includes business succession planning. Business succession planning focuses on facilitating a smooth transition in management or ownership of a business from the founder or current owner to the next generation of leaders. Business owners who engage in succession planning can avoid costly disruption to their business’s operations or power struggles between key employees or family members over management or ownership. Estate planning can help with succession planning through buy–sell agreements, life insurance policies, trusts, and wills to transition the business to new ownership or management.
Minimizing Estate and Business Taxes
Estate planning can also help business owners mitigate various taxes they or their estate may incur. For example, when a business owner passes away, the value of their business interests may trigger estate taxes, imposing a significant financial burden on the owner’s estate that may reduce the wealth their loved ones can inherit. Similarly, selling a business upon retirement may trigger capital gains tax or other taxes that reduce the value of the wealth a business owner spent their career building. However, estate planning strategies that involve trusts, lifetime gifting, or charitable giving can help reduce tax burdens for business owners and their heirs.
Providing for Your Family and Employees
Careful estate planning can also protect your loved ones and your business’s employees when you choose to step away from the business or should the worst befall you. An estate plan can help transition your business to new management or ownership without disrupting the business’s operations, which may adversely affect the company’s value and reduce your family’s inheritance. Furthermore, disruptions from your departure from the business may also have negative consequences for your employees, who may face layoffs due to downsizing or restructuring, or feel inclined to seek new employment due to uncertainties about the business’s future without you.
An estate plan can leverage tools such as obtaining key person insurance policies to facilitate cash-outs of ownership interests. Furthermore, your business succession plan can include executive compensation plans or other incentives to retain key employees who you wish to assume greater management responsibilities after you depart from the company.
The Importance of Working with an Estate Planning Attorney
Working with an estate planning lawyer familiar with Contra Costa County’s business scene and local laws and regulations can help you develop an estate plan tailored to protecting your business interests and the wealth you’ve built for yourself and your family. An estate planning attorney can also collaborate with other professionals to assist you with estate and business succession planning, including corporate lawyers, accountants, and financial planners.
Contact Our Firm Today
If you own a business in Contra Costa County, having a comprehensive, tailored estate plan can help you protect your life’s hard work and pass on the wealth you’ve built to your loved ones. Contact Horizon Elder Law & Estate Planning today for a confidential consultation with an estate planning attorney to discuss your legal options and the benefits of estate planning for business owners like you.