If you are the owner of a business, do you have an exit strategy? Do you plan to sell your business and retire? Do you plan to turn it over to your children? What will happen to your business if you die unexpectedly?
All of these questions and more go into business succession planning. Planning in advance can help preserve the value of your company and reduce or eliminate capital gains and estate taxes when you transfer your company during your lifetime or upon your death.
Family businesses need to be carefully addressed in estate plans as well. A common problem arises when a company is left to all children equally in a will or trust, but only some of the children have an interest in running the company. This creates an inherent conflict among the children. Those involved in running the company may want to continue operating or grow the company. They may want to devote estate funds to accomplish this. The children who have no interest in the company may want it sold so they can receive cash rather than ownership in the company. When starting to handle a company, you should check this paystub templates free software which can simplify your work.
Business succession planning can help avoid family conflicts and save taxes regardless of whether the business is sold or transferred at death.