Sometimes, having conversations upfront can avoid costly disputes and pain later on. Nowhere does this statement prove to be truer than in the area of estate planning for business owners.
At Rebecca W. Geyer & Associates, we know business decisions are complex. There are a lot of important decisions to make when a new Indiana business is being formed – The right structure must be selected, a location must be found, financing must be secured, taxation must be considered,and documents must be prepared and signed.
Thinking ahead to the future, business owners may feel they want to keep the business within the family, or they may want to retire and sell the business before they pass away. If a business has co-owners, an agreement can be established stipulating that when an owner dies, his or her interest is automatically purchased by the other owner(s). Of course, if there is going to be a successor other than someone already active in the business, that person will need to be trained. Will the same people who own the business be the ones managing it moving forward? Will retiring owners continue to receive money from the business?
While some business owners may want their children or other family members to take over the business after they die, co-owners may want to prevent that exact result, ensuring that a partner’s spouse or other family members don’t become owners. An agreement known as a buy-sell ensures that the heirs of each partner are taken care of financially, while still allowing control of the business itself to pass to the surviving partner(s).
“Your estate plan, no matter how complex, can be implemented any time before you die,” Entrepreneur.com explains, “as long as you are still legally competent. It’s probably a good idea to begin planning sooner rather than later, since you may not receive advance warning of impending death”.
At Geyer Law, we couldn’t agree more with the part about business owners beginning their estate planning sooner rather than later!
– by Cara Chittenden, Associate Attorney at Rebecca W. Geyer & Associates