While it might seem too soon to think about this uncomfortable topic, it’s still something that needs to be carefully planned to make everyone’s life a little easier as they handle the grief of losing a loved one.
While 88% of business owners believe their family will control their business in five years, statistics from Family Business Institute show that only 33% of businesses survive to transfer to the next generation, and only 10-15% continue to the third generation.
If you plan to pass your business to your offspring, there is more to keep in mind when creating your succession plan than your descendants—there are also their spouses—especially if they become ex-spouses.
Studies have shown that the number of family businesses owned by second generations and third generations dramatically decline for a number of reasons. One large reason is the lack of business succession planning for the family business.
Estate planning strategies such as family limited partnerships and gifts to charitable trusts are part of an estate planning professional’s toolbox to achieve client goals, such as minimizing taxes, effectuating philanthropic plans, teaching younger generations about a family business and passing on wealth.
Coupled with the upcoming presidential election, small to mid-sized business owners are faced with a slew of financial decisions that could impact the wealth of their business and the legacy they leave to their successors.
Estate planning attorneys are getting mobbed with questions. Here is some timely advice from three attorneys on what families and business owners should be doing to prepare, in case the unimaginable happens.
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.
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.
If you own a business, you’ve always got plenty to think about: sales, marketing, employees, competition, industry trends and consumer preferences. The list goes on and on.
