As a recent article explains, the majority of baby boomer wealth is held in privately owned businesses. Currently, there are approximately 12 million such businesses. Experts predict that, within the next 20 years, over 70 percent of these businesses will be passed on to the next generation. When planning for these transfers, business owners need to be aware of three common threats that may undermine a successful business transfer.

The first threat is placing incorrect names on the deed to any business real estate. When a business operates on real property, it is vital to integrate the business ownership with the real estate ownership. This integration encourages both tax and estate planning benefits. Remember that deeds trump any language in your will, so review all designations carefully.

The second threat is business documents that are either outdated or inadequate. Such business documents often end up costing your heirs time and money to sort out the mess left after your death. Consider having your estate planning attorney review all such documents annually to avoid this issue.

The final threat is a disconnect between your estate plan and business agreements. A business owner should consider the overarching goals of his or her estate plan before making business agreements, so that these arrangements are integrated.

For assistance in estate planning for your business, contact us at (626) 696-3145.

Comments are closed.