Many business owners or those who ran family businesses want their family members, such as children, to take over and manage the business when they die. If that is something you would be interested in, then you have to take the appropriate measures in your estate plans. Here are some of the tips to help your heirs take control of your family business when the time comes:
Give Your Heirs the Necessary Experience
Running a business is difficult, especially for those who don't have experience. Therefore, it's not wise to thrust the business upon unsuspecting heirs; it may frustrate them, and they might even run the business to the ground. Therefore, ensure your heirs are getting the experience necessary to run the business while you are still alive. For example, you can give them some roles in the business or even help them secure suitable positions in other businesses within the same industry.
Incentivize Your Best Staff to Stick Around
Your successors are more likely to succeed in the business if they have your qualified staff helping them. A business in transition is also more likely to be stable if its best staff helps with the transition. Therefore, put some incentives in place to help your best workers, especially the management, stick around so that they can help with the transition.
Consider Deferring the Estate Tax
Your inheritors will have to pay an estate tax if they want to inherit your business, but a onetime payment can hurt their business and cripple the transition. Fortunately, it doesn't have to be that way, because they can pay the tax in installments. This is possible with estate tax deferral, a tax code that allows estates to extend their tax payouts so that they can make installment payments instead of a lump sum payment.
Prepare Your Heirs for Their Inheritance
Ideally, you should prepare your loved ones for their inheritance. This may not be necessary if you don't care what they do with the business and you don't even care if they sell it. However, if you want them to take over your business and run it as a family business, they should be prepared to do so. For example, you don't want your children making extensive alternative long-term plans that don't involve the business when you know very well that they will be inheriting it.
Hopefully, the tips above will help your heirs inherit your business with ease. Don't forget to consult an estate planning attorney to help you with the preparations.
If you've recently moved into a new house and your neighbors are claiming you've infringed on their property line with your new fence, you may not know what to do. Sure, the idea of contacting a lawyer can be intimidating, but if your neighbors are insistent that you're on their property and you can't prove otherwise, an attorney may be the best choice. I created this site to help people just like you understand the laws surrounding property boundaries, real estate claims, and similar issues. I hope that the information here will give you some clarity as to whether or not you need to consult an attorney to protect your interests.