Beyond the Living Trust
Advanced forms of wealth transfer and estate planning are more complicated, and consequently more expensive to implement. However, their costs and complexity are almost always dwarfed by the tax savings, and capital preservation, they achieve. On January 1, 2011, the estate tax exemption increased to $5,000,000, meaning that a married couple can now pass $10,000,000 to their heirs estate-tax free by the simple expedient of establishing a fully tax-planned living trust. Coupled with the probate-avoidance features of a living trust, everyone should have a living trust where an estate of any substantial size is involved.
6 Proven Rules for Succession Planning
Many businesses fail to stand the test of time because the business owner is unwilling or unable to let go and begin the process of finding a good replacement. The average life expectancy of a family business is 24 years. Only 30 percent of family businesses make it to the second generation and only 10 percent are passed along to the third generation.
Beyond the Family Trust
On January 1, 2011, the estate tax exemption increased to $5,000,000, meaning that a married couple can now pass $10,000,000 to their heirs estate-tax free by the simple expedient of establishing a fully tax-planned living trust. Coupled with the probate-avoidance features of a living trust, everyone should have a living trust where an estate of any substantial size is involved.
Preventing Business Disagreements
Buy-Sell Agreement Will Help Prevent Business Disagreements || Unless you are the type who looks forward to going into business with your ex-partner’s spouse, most small and mid-size business owners need a written buy-sell agreement to prevent future problems. No matter how small the business, when there are multiple business owners, it’s smart to have a binding buy-sell agreement which applies to everyone in the event of the death or disability of an owner, or disagreement among the co-owners.
Tax Benefits for Family Business Owners
Family Limited Partnerships Create Big Tax Benefits for Family Business Owners || Family limited partnerships are emerging as a favorite tax advantaged vehicle for transferring family businesses or real estate to the owners’ sons and daughters. If properly created, funded and operated, family limited partnerships can be used to achieve considerable income, estate and gift tax benefits.
Selecting Your Business Successor
Selecting a successor is much more difficult for most entrepreneurs than choosing a spouse because they hate to think about ever leaving the company they started. It’s just like going to the dentist for most business owners. The last thing that any entrepreneur wants to admit is that he or she is replaceable. After all, these owners started the business from scratch, struggled through the tough early years and usually have spent more time keeping the business above water than they have with their families.