Welcome back to our final blog about estate planning for business owners. Our lawyer in Raleigh NC is here to talk more about estate planning for business owners. If you have questions during any of the blogs in this series, be sure to contact us at any point.
In our last blog we talked about shareholders and buy-sell agreements. As we previous mentioned, the main purpose of this contract is to establish a sale price for the business, or for your share of the business. It also lets you decide if you want your partners to buy out your portion of the business.
If you want to keep a certain person from having a stake in the business, you can designate that. If you decide that you want your heirs to sell your share, then having this document, which shows the sale price or value, will ensure that they are receiving a fair amount.
Estate Planning For Business Owners | Lawyer in Raleigh NC
Life insurance is another factor that you will need to take into consideration if you want your partners to buy out your share of the business. It is common for each partner to take out a life insurance policy naming the others as beneficiaries so that the surviving partners can afford to buy the deceased’s share.
Another option is an irrevocable life insurance trust (ILIT), which can help prevent liquidity problems. The policy underwriting the ILIT should avoid probate, so they can pass to the beneficiaries immediately to pay for estate taxes or other fees. In addition, if your business changes drastically from the time you create an ILIT and the time you die, the gap may be covered by this trust.
A family limited partnerships can be created if you want to transfer the business to family members without leaving them with the tax liability.
Creating an estate plan for your business can sound like an overwhelming process, but it does not have to be with the help from a lawyer who has experience. If you have questions about taxes, life insurance, buy-sell agreements or how to create a succession plan, you can talk with an attorney to get the answer you need so that you can protect your business, partners and family.
Eldreth and Eldreth | Lawyer in Raleigh NC
Our lawyer in Raleigh NC is here to help you with all your small business needs. Whether you're starting a new venture or making changes to an existing company, we can help with legal situations. Contact us to make an appointment!
As always, feel free to contact us with any questions or concerns you may have about estate planning. Also contact our lawyer in Raleigh NC to schedule a consultation if you have yet to start estate planning. It's never too early to make plans for your wishes upon death. In addition, our lawyer is here to help you with all your legal matters, whether it be estate planning, divorce, child custody, trademarking, copyrighting, or DWI issues.
If you missed previous blogs in this series, be sure to visit them, here:
- Estate Planning for Business Owners Part 1
- Estate Planning for Business Owners Part 2
- Estate Planning for Business Owners Part 3
- Estate Planning for Business Owners Part 4