Smart Estate Planning For A Family Business

If you own or operate your own business, you likely have valid concerns regarding the future of your business should you pass away. Estate planning for a family business requires working with a competent estate planning attorney who can assist you with drafting a legally sound business succession plan.

If you are the sole owner of your business, you will need to determine who you feel is a successor capable of taking on the responsibilities of running your business. This person does not have to be one of your heirs. Regardless of what you decide, controlling these types of choices is critical. The death of a family member is hard enough to deal with on its own. Proper estate planning for a family business at least allows your business to have a smooth transition.

Many individuals share ownership of their business with others and wonder what happens to their ownership interest upon death. If you are in a partnership with another person, it is recommended that you draft a buy-sell agreement that clearly dictates each owner’s responsibilities and rights regarding the business. If one owner dies, the agreement will dictate what happens to that owner’s interest. The interest can be inherited by a family member or can be sold to the surviving partner for a price stated in the agreement. If you fail to include your business in your estate plan, unwanted individuals like creditors may successfully take over your ownership interest when you pass away.

In addition, it is important to consider all business loans that are outstanding for your family business. When you are unincorporated, your solo business is part of your personal assets. These loans will pass on with your estate. If your child inherits your business, your child may also be inheriting your loans.

If you or a loved one owns a business and has questions about business succession planning, contact The Sullivan Firm, P.C. for a free consultation on how estate planning can help protect and preserve your family business. Call The Sullivan Firm P.C. at (978) 325-2721 to schedule your evaluation.

Troy Sullivan, Massachusetts Estate Planning AttorneyThe Sullivan Firm, P.C. is a boutique probate and estate planning law firm serving the North Shore and Cape Ann of Massachusetts including Gloucester, Rockport, Manchester and Beverly. The firm concentrates on estate planning matters, including trusts, wills, healthcare proxies, life planning, probate, special needs trusts, and trust administration.