The gap between what your current business is worth during the process of completing your estate and succession planning and what it could be worth in the future when you pass away should be considered as part of your overall planning process.
Many people choose to address this financial gap using a tool known as an irrevocable life insurance trust. When an irrevocable life insurance trust is structured correctly the benefits in that insurance policy do not pass through probate and can be available to your beneficiaries immediately. This can provide valuable cash reserves for the payment of estate taxes or other concerns.
You might also wish to retain a source of income for yourself while passing your business assets onto your children, and you might be able to use a tool known as a grantor retained annuity trust to accomplish this.
If assets inside grow during the course of the trust, the appreciation is not subject to estate taxes if you’ve done your planning properly. This can be a very beneficial and powerful tool for passing on a business that is growing rapidly. As with all things related to business succession planning and estate planning it is important to have the support of an experienced lawyer to guide you through the process. Schedule a consultation with a dedicated lawyer today to learn more.