Estate Planning for Business Owners

Estate planning is vitally important to protect your family, your assets, and to guide your loved ones in handling your health and financial affairs if necessary. But business owners face a unique challenge. Family may be relying on the business assets, a colleague may be anticipating taking over ownership or management of the business, and customers expect a smooth transition when any internal changes occur. So where do estate planning and business planning intersect? Succession planning.

Succession planning is, in part, a business plan used to pass down leadership roles and, in terms of its relationship with estate planning, planning for a change in ownership when a business owner retires or passes away. It includes how to transfer ownership smoothly, and how to handle potential disputes with family members and/or heirs.

Taxes. One of the main concerns for Florida business owners is the federal estate tax. As of 2023, if the value of the decedent’s estate exceeds $12.92 million, any amounts above that amount will be taxed. In order to determine the value of the business, we work with financial professionals to determine the fair market value of the business as well as considerations such as future earnings and how a change in ownership or management may impact the continued success of the business.

Growth. A business continuity plan may be implemented as part of your estate planning process to outline how the business will be managed, and what customers and the industry expect if the business is going to continue to thrive. The plan may also provide for financial security for family members, loved ones, and other stakeholders.

Protection. Estate planning can also help to identify and protect certain business assets from creditors or lawsuits and protect the business owner from personal liability.  A business trust and/or personal trust can manage assets and also help business owners achieve a retirement plan while considering the needs of their families in the future.

If you’re a business owner, valuation, minimizing taxes, retirement, and succession planning are all important aspects of a well thought out estate plan and business plan. If you own a business, give us a call and let us help you prepare for a profitable career and a carefree retirement.