Running and owning a business is just like raising a child: Both are investments in the future, and both require a lot of time, resources and effort to raise successfully. One can argue that you would treat your business like you’d treat a child; you’d want it to succeed even after you’ve passed on or retired.
With a new year upon us, it is a perfect time for people who have not begun the process to understand the benefits of getting a plan started.
Gifting interests in a closely held business can be an effective estate planning technique. It can save on estate taxes and reward family members for their hard work in running the family business, while transitioning ownership to the younger generation.
Many people equate estate planning with older people who have more assets and more to protect. However, that doesn’t mean younger people should ignore the benefits of estate planning. According to Caring.com, only 34% of adults ages 35 to 44 have a will and 18% of adults ages 18 to 34 have one.
As closely held business owners know, their financial plans, retirement plans and estate plans are inextricably linked to the value of the business.
Developing a proper business plan, securing financing, marketing, paying taxes and all of the other small, but significant, details will surely be some of the most challenging yet rewarding work that you will perform in your lifetime.
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