Don’t Forget Estate Planning for Your Family Business

Bigstock-Couple-running-bookshop-13904324Skilled estate planning is essential to the tax-efficient transfer of the family business across the generations. While the majority of family business owners have estate plans, the majority of these plans can be considered dated. Family businesses are responsible for more than 70% of global production and are one of the principal creators of private wealth. Often critical to the continuity of the family business and to the perpetuation – if not enhancement – of family wealth is estate planning.

 

Forbes’ article, “Most Family Business Owners Should Update Their Estate Plans” reports that an international survey of 336 middle-market family businesses found that more than 90% of family members who are senior executives with equity in the firms have estate plans. That’s the good news. Now the bad new: only 22% of these estate plans have been updated within the last two years. About a quarter of them have been updated between two and five years ago, and the rest—almost half—have not been reviewed in over five years.

 

Most estate plans become “old” after a few years. This means that situations change, such as family relationships, business matters, and their net worth—making it prudent to review and potentially refine their estate plans.

 

In addition to out-of-date estate plans, the quality of these plans must be questioned, as some family business owners don’t take advantage of strategies to reduce estate, gift, and other taxes. In some situations, there are ways to improve the financials of the business and provide economic benefits to the family at the same time.

 

Speak with an experienced and qualified estate planning attorney to make sure that your estate plans is up-to-date and is designed to take into account the latest advanced planning strategies.

 

Reference: Forbes (September 15, 2015) “Most Family Business Owners Should Update Their Estate Plans

 

Please visit our site, www.ssslegalconsultancy.com, for information on today’s topic.

 

 

Publish on: 09-Sep 24, 2015

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