An ownership interest in a small business or professional practice is likely your family’s most valuable asset. Succession planning ensures your business continues to provide for your family if you die or become incapacitated. Ana M. Veliz is a reliable estate planning attorney who you can count on.
Effective succession planning is an ongoing process, and you must be prepared to adjust the plan as changes occur in your family, the economy, tax laws, and government regulations. A Coral Gables business succession lawyer could help you devise a plan and adjust it as circumstances require.
Most business owners hope their business will continue to be successful after ownership and management passes to the next generation, or key employees. Business succession planning involves creating a blueprint to support the business’ continued financial viability and minimize the tax consequences of the transfer.
In many cases, it also involves managing family members or employees who might feel slighted if the plan does not elevate them as they had hoped. Sometimes the best solution is to seek an external candidate or buyer to take over the business. A skilled Coral Gables attorney could help business owners devise a succession strategy for future leadership that best suits their situation.
Protecting family members is another essential element in succession planning. When there is more than one business or practice owner, defining the other owners’ obligations if one of them dies or becomes incapacitated is essential. Without this, grieving family members might face legal disputes and financial hardship.
When a business owner becomes incapacitated or dies, the business may lose income or be forced to shut down, causing significant hardship for the owner’s family. When there are multiple owners, the deceased or incapacitated owner’s heirs may be entitled to participate in business decisions, which may not always be desirable.
A succession plan could include a life insurance policy to ensure a business has adequate liquidity to operate after an owner’s death. When there are multiple business owners, buy/sell agreements can provide cash for the family of the deceased owner while allowing the remaining owners to continue to operate the business themselves or find a new partner.
A business succession plan and a comprehensive estate plan work together to protect the family of a business owner, so it is essential to seek counsel from a Coral Gables attorney who has extensive experience in both areas.
Understanding and planning for the tax implications of succession is critical, since errors can be costly and might impair business operations. Proper planning can ensure liquidity and ease the transition into new ownership.
When a business owner dies, the value of the business at the time of death could be counted in the value of their estate and create estate tax liability. In some cases, a buy/sell agreement could freeze the value of the business which might limit the assets subject to estate tax.
Strategic gifting of shares and other actions can reduce the likelihood a business owner’s family would face estate taxes. However, avoiding gift tax liability could require the gifts to occur incrementally over years. The transition to a new ownership could also trigger transfer taxes. Working with a skilled Coral Gables business succession attorney could ensure that a plan minimizes tax liabilities and is as tax-efficient as possible.
Thorough preparation is often the key to success. A carefully thought-out succession plan can help your business thrive after you pass it into someone else’s hands.
Discuss your situation with a skilled Coral Gables business succession planning lawyer like Ana M. Veliz, who is based in this community and understands the landscape in which you operate your business and raise your family. Call us now for a consultation.
We evaluate your case and determine how we might be able to help.
We will meet with you to discuss your next options and lay out a plan.
Our team guides you throughout the process so you feel confident about your choices.
(305) 250-9917