Business Continuation Planning
This is a tough question... but what happens if you become disabled or die?
Your business provides you with an income sufficient to support your family. You have created a lifestyle and your family is dependent on your business to maintain that lifestyle. You have built your business into a valuable asset, one that creates a regular stream of income.
But, have you really considered what happens if you die or become ill? What impact will your death or disability have on your stream of income that you and your family is dependent upon? It's time to ask yourself these questions:
- If you become disabled, who would operate your business?
- If you die, who will own and operate your business?
- Can your business continue to provide your family with an income if you die or become disabled?
- Can your family pay for the estate taxes that may arise upon your death?
You may be surprised to learn that upon your death the business may have to be sold in order to preserve its value or to pay for the inheritance and estate taxes.
Business owners usually have three options at their disability or death:
- Keep the business for the family to operate
- Sell the business to co-owners, an employee or to a third party
- Sell or liquidate the business.
As lawyers and trusted business advisers to small business owners, we have counseled clients on creating a business continuation plan to help you determine which of these alternatives is best adaptable to your unique situation and to find funds that will be needed to assure that your business continuation plans will be implemented. This estate planning process is now complicated by the changes to the estate tax laws. The Tax Relief Act of 2010 ended the estate tax exemption at the end of 2012. This, and other complicated and ever-changing tax laws make it imperative to have proper estate planning in place. As a business owner you need to be mindful of the changes to the law in order to find a method that will best provide for your family upon your death or disability.
Please contact us at 847.823.9030 for a personal consultation to evaluate your unique situation and establish a plan that protects your business and family.