I can clearly remember the day I went down the alley to the back door of my favorite local deli, only to be greeted by a crudely lettered sign stating they would be closed indefinitely due to the death of the owner.
I was stunned. The deli owner was an engineer who took early retirement to open a bakery and deli he loved, which was part of our community for more than 30 years.
The deli never reopened. His wife and kids had worked there, but apparently they were lost without him, and the business was lost to the probate process.
Failure to devise a proper estate plan and arrange for the transfer of the business is a leading cause of business failure after the death of the founder. By some estimates, less than 13 percent of today's family businesses stay within a family for more than 60 years.
Additionally, the value of the business declines everyday that passes subsequent to the death of the founder. The failure of a business can have a devastating effect on family and employees who rely on the income, and it also can have a devastating ripple effect on the community.
Proper planning can reduce or eliminate estate taxes, which might otherwise be due when the founder dies. Proper planning may make the difference between whether a business continues to contribute to the vitality of the community it operates in or is forced to be liquidated to pay estate taxes due within nine months of the owner's death.
If you are a business owner, what would happen to your company if you died suddenly? How long before your business would begin to depreciate in value?
Do you intend for the business to be liquidated at the time of your death or kept under family control? If liquidated, do you have a buyer in mind and a plan for funding the purchase?
If kept in the family, who should have ownership? Who should have a continuing income interest? Who should have control? Who should be in charge of day-to-day operations? Are any or all of these the same people?
It is imperative that business owners plan for the day they want to retire, as well as for the possibility of a sudden or unexpected incapacity or death of themselves or key employees. Whatever the form of your business entity, whether sole proprietorship, corporation, LLC, partnership or something else, simple steps can be taken to arrange for the continuance of your business if you become disabled and the avoidance of probate when you die.
For more information, call (760) 745-7576 or visit www.estateandtrustlaw.com.
I was stunned. The deli owner was an engineer who took early retirement to open a bakery and deli he loved, which was part of our community for more than 30 years.
The deli never reopened. His wife and kids had worked there, but apparently they were lost without him, and the business was lost to the probate process.
Failure to devise a proper estate plan and arrange for the transfer of the business is a leading cause of business failure after the death of the founder. By some estimates, less than 13 percent of today's family businesses stay within a family for more than 60 years.
Additionally, the value of the business declines everyday that passes subsequent to the death of the founder. The failure of a business can have a devastating effect on family and employees who rely on the income, and it also can have a devastating ripple effect on the community.
Proper planning can reduce or eliminate estate taxes, which might otherwise be due when the founder dies. Proper planning may make the difference between whether a business continues to contribute to the vitality of the community it operates in or is forced to be liquidated to pay estate taxes due within nine months of the owner's death.
If you are a business owner, what would happen to your company if you died suddenly? How long before your business would begin to depreciate in value?
Do you intend for the business to be liquidated at the time of your death or kept under family control? If liquidated, do you have a buyer in mind and a plan for funding the purchase?
If kept in the family, who should have ownership? Who should have a continuing income interest? Who should have control? Who should be in charge of day-to-day operations? Are any or all of these the same people?
It is imperative that business owners plan for the day they want to retire, as well as for the possibility of a sudden or unexpected incapacity or death of themselves or key employees. Whatever the form of your business entity, whether sole proprietorship, corporation, LLC, partnership or something else, simple steps can be taken to arrange for the continuance of your business if you become disabled and the avoidance of probate when you die.
For more information, call (760) 745-7576 or visit www.estateandtrustlaw.com.