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You worked hard to establish your business, so it’s natural to want to protect its future and make clear decisions about what happens to your assets when you die. A Buckeye estate planning lawyer can advise you on business succession planning and other ways to secure your legacy.
Why Do Business Owners Need an Estate Plan?
Everyone needs an estate plan. However, estate planning for business owners involves taking specific steps to continue the business’s success and provide for your family’s financial security. Not only can the plan provide for the smooth transition of leadership and management and minimize tax liabilities, but it also prevents harmful and potentially costly disruptions to the business. Inadequate estate planning can impact the business’s continuity, which is crucial to its future stability. By taking the time to develop an estate plan, you lay the groundwork for the future of the business.
Key Components of Estate Planning for Business Owners
While no two businesses are alike, business owners often share the goal of safeguarding the business to provide a seamless transition after their death. You can accomplish this task through legal instruments like:
- Wills – A will allows you to dictate how your shares in a business are distributed after your passing.
- Trusts – Alternatively, you can place the business or certain of its elements within a trust, which passes to designated beneficiaries without the need for probate.
- Buy-sell agreements – A buy-sell agreement outlines the terms of a sale or transfer of ownership in the event of your death, ensuring a fair transition to your business partners.
- Business valuations – A professional business valuation can determine how to distribute assets and minimize taxes based on the company’s worth.
- Succession plans – Selecting and preparing your successor ahead of time will provide for your peace of mind and the continuity of the business.
Tax Planning When You Own a Business in Buckeye
The transfer of ownership interests in a business upon your death can trigger significant tax liabilities, including capital gains or estate taxes. Careful planning is crucial to minimize these burdens and ensure tax compliance. The federal estate tax is a tax on your right to transfer property upon death. It entails a complete accounting of your property on your date of death, called your gross estate. Although Arizona does not have a state estate tax, its residents are still subject to federal estate tax requirements. If you own a business and have a high-net-worth estate subject to federal estate tax, an estate planning attorney in Buckeye can help you develop strategies to limit tax liability for the business and your heirs.
Choosing an Estate Planning Lawyer
The person you choose as your estate planning attorney can greatly impact your business’s future. Here’s what to look for when making a selection:
- Experience – How long have they helped business clients with future planning?
- Knowledge – Are they providing a comprehensive plan that meets your business goals and looks out for your partners?
- Reputation – What do other clients say about the attorney and their services?
Get Started with Your Estate Plan at Pennington Law, PLLC
If you are a business owner seeking to safeguard your company before you die, a Buckeye estate planning attorney at Pennington Law, PLLC can provide the guidance you need. Contact us today for a confidential initial consultation.