It may seem like just yesterday when you took your initial leap of faith and launched your Arizona business. Perhaps you have fond memories of the jubilation and celebrations that followed the day you actually hung the open sign above your threshold (whether online or at a brick and mortar structure). Fast forward 10, 20, perhaps even 30 years and your thoughts and focus are shifting toward the future, namely: Who will carry on what you started after you're gone?
If you have grown children, you may already have discussed the issue with them. Perhaps you have even gone so far as to designate who will own your company, who will manage it (since it doesn't have to be the same person) and who will roll up their sleeves and carry out the day-to-day duties, be it sales, consulting or providing a public service. Talking about such matters is one thing; however, you may want to take it a step further and put a business succession plan in writing.
Key facts regarding business succession and estate plans
Do you already have an estate plan? If so, it may be fairly simple to update your plan to include instructions regarding your business succession plan. If you've thought about executing an estate plan but have never actually done so, you can definitely kill two birds with one stone here by incorporating your business plan into your estate portfolio. The following list provides information that may be helpful as you seek to protect your interests and pave the way toward continued business success when the time comes for someone else to carry on your legacy:
- It's typically best to research all tax laws that apply to estate plans and business succession ahead of time. One thing to remember is that the value of your business at the time of your death determines estate taxes, which may be substantially greater than it was when you executed your plan.
- While you're researching, you may also want to find out more about various types of trusts that may be available so you can help your successors avoid certain taxes.
- Estate plans and business succession aren't solely about money. You may put names in writing for each specific role you wish to hand down to your family members, including who will own the business, who will work there and who will manage the workers. This may be one person for all jobs or several for each.
Executing an estate and business succession plan is a personal endeavor that is highly customizable. It's your estate and it's your business. You have worked very hard through the years to build success and prepare a lasting legacy for your children. Putting everything in writing and making it legally enforceable by having appropriate witnesses present is one of several ways you can help your loved ones avoid probate and minimize taxation.
Estate planning and business succession laws vary by state. If you intend to file a plan in Arizona, you may wish to consult with an experienced estate planning attorney who can help you cover all bases and can also be on hand as time goes on to make any updates or adjustments as needed.