Using a trust can place business succession in a well-controlled structure that, when done earlier than succession might actually occur, allow assets to grow within the trust. The most appropriate way to do this is usually creating a grantor trust with the intentional flaw that income taxes are still paid, beneficiaries are shielded from tax and the grantor transfers assets that normally would have remained in his or her estate and been subject to higher tax rates.
In passing along value while retaining control, assets are leveraged and will grow outside the grantor’s estate. A succession structure may be built within the trust, shielding it from future disruption such as sibling rivalry or divorce.
Putting a little bit of effort into your business succession planning can go a long way towards preventing problems now and in the future. Consult with a New Jersey business succession planning attorney today to learn more about your options and determine the key questions you’ll need to consider in this process. Contact info@lawesq.net for more information.