Guide to Creating an Estate Plan for Your Business

Here are some tips on getting started:

1. A business without a workable plan for succession and management after an owner's death is almost guaranteed to expire along with the owner. Roughly two-thirds of all family businesses fall apart during the transition.
2. The sooner you start an estate plan for your business, the better. It's less expensive and there are fewer complexities if you set up a plan in the early stages of your company's growth.
3. If you choose to transfer your business assets to your heirs, a plan that does so over a period of time can dramatically decrease their tax liability.
4. Communicate regularly with advisers, including your accountant and lawyer, about your plans so there is no steep learning curve if an unforeseen event occurs. Keeping advisers up to speed decreases the chance of a costly error.

Tips & Tactics
Helpful advice for making the most of this Guide

• Let reason, not emotion, be your guide when dealing with family members. If a family member lacks the skills to take an important position following your death, hire and retain a non-family member and find another way to compensate your relative.
• Keep your heirs and employees in the loop about your plans. It can decrease tension and give everyone an added incentive to learn to work together before the plan takes effect.
• Your plan should include a way to purchase the assets of your business partner or partners. If a partner dies and the spouse, who has no desire to be in the business, inherits the assets, you may be forced to sell the business to pay for the spouse's share.
• Re-evaluate your plan as changes take place in your life – divorce, growth in assets, birth of children, illness.

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