Failing to properly plan for disability, death, or the ultimate transition of a family business can lead to disastrous financial consequences for both the business and the family.
You spend a lifetime building your business, so it’s crucial to have a game plan when it’s time to leave. Being prepared will help optimize the transition from a financial and tax perspective.
These vehicles let a family manage multiple interests, preserve parental control and protect assets from claims of creditors and divorcing spouses, among other benefits.
According to the Exit Planning Institute of Ohio, recent studies show that over 60% of the current U.S. business market is owned by baby boomers (those born between 1946 and 1964), who are ready to exit or transition their business over the next 10 years.
In coming years, millions of Baby Boomers — those born between 1946 and 1964 — are expected to retire in the U.S. In fact, by some estimates nearly a quarter of this country’s population will be aged 65-or-older within a few decades.
An effective estate plan uses a collection of documents and teamwork to protect one’s assets and personal property. An effective estate plan also explains and carries intentions of how to pass control down to successors in the event of your absence.
Small business owners have their hands overflowing with issues, and they devote most of their time to matters related to the smooth running of the business. Having no time to think about other matters, they do not bother about estate planning for them.
You may be running your business for years without any thoughts of selling and then suddenly receive an offer to buy your firm. It could be from a private equity group, a competitor or a key customer or supplier.
No one can predict the future—and navigating that reality is precisely what makes estate planning so complicated.
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