“A recent survey by TD Bank shows that 47% of small business owners do not have a retirement plan in place.”
As many of us small business owners know, running a family business demands your constant attention. But what happens when you’re ready to retire? As this article in USA Today points out, a surprising number of people do not have an answer to that question.
Perhaps it’s too emotional to contemplate passing on your “baby” to someone else. Or perhaps you just never thought about the day that you’d be retiring. No matter the reason, business succession planning is critical to the health of both your business and your bank account. A business is often the single largest asset in one’s estate. Without careful succession planning – no matter whether your departure is the result of a carefully scheduled retirement or an unexpected incapacity – your business becomes extremely vulnerable to outside forces.
However, with a proper business succession plan in place, the future can be bright. By meeting with an estate planning attorney now, you can, among other things:
- Establish a proper ownership structure for your business to maximize profit and limit tax implications;
- Protect assets, including funds from disability and life insurance policies, from the reach of creditors;
- Structure a business transfer in a way that is both safe for the business and financially savvy for you;
- Create a plan to incentivize key employees to remain committed to the company; or
- Determine the best timing and structuring for winding down a closing business.
No matter the succession plan you choose, you don’t want to see your blood, sweat and tears end in a hasty transaction or in the hands of an unqualified family member. Nor do you want a lack of succession planning to result in significant estate tax implications for your family upon your death. Sit down with your estate planning attorney today to discuss these important issues and to come up with a plan that feels right for you.