Posted on: 11 November 2019
If you have created a successful small business and now that it's established you are wondering how you can make sure it goes to your kids, you want to meet with a tax attorney. There are many things that need to be done to be sure that the business is willed to the kids, and there are tax breaks and procedures for passing a business from one generation to the other.
Consider Estate Planning
It may be time for you and your spouse to sit down with a lawyer to plan your estate. This means establishing the following things:
- Will executor
- Power of attorney for medical emergencies
- Person to obtain custody of the children
- Financial distributions
- Asset division
- Business responsibilities
- Trusts for the children
When planning your estate you want to determine how much money needs to be left behind for your kids and for the business. They will help you figure out your will right away and then move to the business decisions.
This would be the time to go over life insurance, savings funds, and everything in your portfolio to figure out how much you would have left to give potentially. Having everything documented helps prevent problems.
When you are transferring ownership of a business from a parent to a child, there are savings in taxes and some taxes you will be exempt from. You need to work with the tax attorneys to find out what the best way will be to get bought out and if distributions can be used to pay for some of the taxes and fees your children will have to pay.
Your lawyer should be able to help you prepare for this so your children don't have any complications if you are deceased when you are trying to pass over the business to them and when they are trying to figure out their inheritance.
There are a lot of things that have to occur legally for your children to get what belongs to you and for your children to get your business as well. Make sure that you meet with a tax attorney to go over the specifics and that you have planned your will properly, to be sure that there isn't any confusion when you pass.
The lawyer will also be able to show you the options for transferring the business while you are still alive. This helps you feel at ease knowing that your business and finances are managed if you pass.Share