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Estate planning is essential for everyone, especially small business owners, many of whom are responsible for their family members, employees, and partners. Deciding what should happen to the business you’ve built will ensure your wishes are respected and reduce the risk of disputes. Below are a few aspects every business owner should understand about estate planning.

Estate Planning for Small Business Owners

Reducing Taxes

Small businesses with valuable assets may be subject to the estate tax, which could total up to 40% of its value. These taxes are generally due within nine months of the owner’s passing, which means family members must often liquidate the business. However, careful estate planning may allow you to minimize the burden by taking advantage of special deductions and tax breaks.

Establishing a Succession Plan

estate planningMany small business owners choose to pass the business to their children, which can cause conflict if not handled carefully. Or you may decide to leave a trusted employee in charge of your business while dividing other assets among your children. Whatever your wishes, a succession plan ensures that your business continues as you would have intended.

Dividing Interests With Partners

Partnerships are especially vulnerable to conflict after the death of an owner, since their share may go to someone with no experience or interest in running the business. Your estate plan allows you to sell or pass your portion of the company to someone you trust. In this case, you may want to prepare a buy-sell agreement, in which your partners agree to buy out your heirs when you pass away.

 

Since 1999, the estate planning attorneys at Scott & Heenan have helped business owners throughout Grant County, WI, prepare for the future. Drawing on their extensive experience, they can identify potential issues and create solutions before they cause conflict among your family members, partners, and employees. Visit the website to learn more about their legal services, or call (608) 348-9506 to arrange your initial consultation.

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