A family business is likely a central part of your life. You’ve put years of hard work into building and running a successful company, and you’re proud of everything you’ve done.
As you get older, however, you worry about what may happen with your business in the future when you’re no longer around to run it. Are you going to sell it? Close it down? Or will you pass it onto someone else in the family?
Business owners who want to keep their company running should consider all the options available for the future. When you’re drafting up estate plans to take care of your home and other valuables, you must include a succession plan for your business as well.
Succession plans can be created according to what best suits your family. The following are a few of the most common ways you can transfer your business:
- Through a will – You can name your successor directly in your will, which means your business will pass onto that person after your death.
- Through a living trust – A living trust allows you to transfer the business into the trust and name your successor as the trustee. With a living trust, you can continue running the business as usual, and your successor will be able to keep the company after you pass.
- Through a sale – For a much more direct route, you can sell your business to your son or daughter before your death to guarantee it will continue in their hands.
It’s important to note that these plans are not without challenges. Many business transfers include serious tax considerations that you should plan for before making your final decision.
As you make arrangements for your business, you should discuss your plans with your family and with an experienced estate planning attorney. They can help you through all the details and make it easier to avoid challenging complications such as estate taxes and probate.