Estate planning is important for just about everyone. However, if you own a business that you want to thrive long after you're gone, a carefully crafted estate plan is essential. A business owner can use his or her estate plan to designate who will own and manage the business and who will benefit from its continued success.
An estate plan, if done properly, can also help minimize taxes. Here in Maryland, those who inherit part of an estate may have to pay state as well as federal estate and inheritance taxes. Estate planning can help your heirs and beneficiaries keep more of the assets you've worked so hard for rather than pay a significant chunk to the government.
Under the new tax laws, beneficiaries can inherit about $11.2 million tax-free. While that's a considerable amount in personal wealth, a successful business may be worth far more than that.
A valid estate plan also helps heirs, beneficiaries and executors stay out of probate court. Probate is a time-consuming and expensive process. It also puts decisions in the hands of judges who don't know the deceased, the family or the business.
If you own a business, it's essential to discuss what will become of it when you're gone with your children and other loved ones before drafting your will. You may have children who have worked in the business and who want to take it over when you're no longer around or able to manage it.
You may also have children who want to pursue other professions, but whom you want to benefit from the fruits of the business you've built. You can ensure via your estate plan that all of your kids and other loved ones are treated fairly.
Drafting your estate plan with the guidance of an experienced Maryland estate planning attorney is a crucial first step to ensuring your legacy for your family. However, it's essential to regularly review your plan and amend it whenever life events or other changes warrant it. Your attorney can help you keep your plan current at all times.
Source: Hotel Management, "How to handle estate planning for continued business growth," Alicia Hoisington, accessed March 08, 2018