A company that you started with your spouse decades ago may hold sentimental value for you but it also has significant financial value and possible future value if your children or other heirs intend to take it over. There are multiple different things you need to consider in the process of business succession planning for a family-owned business.
Often the emotions and conflicts that are present in a family owned business may be more difficult to deal with, highlighting the importance for an experienced business succession planning attorney. First of all, you must consider exit strategies. You must evaluate whether or not your children have the desire and the qualifications to take it over and to outline the appropriate exit strategy for the family from a financial perspective. Transferring a business can generate major tax implications if you don’t do advance planning.
You might lose 30% or more to taxes which could impact the departing business owner’s retirement. Communication with key employees and family members is another crucial component of business succession planning. Discussing the plan helps remove uncertainty about the business’s future and involving advisors to help with the streamlined process can keep everyone informed and confident. Business succession planning should also coordinate with individual estate planning tools. Transferring assets to children is a common concern for people in this situation but this needs to be done carefully and with the guidance of a lawyer who has worked in this field for many years.