If you are a small business owner you have to consider how you intend to exit from the business when you are making preparations for the future.

Depending on the type of business that you have coupled with your family dynamic a number of different approaches can be optimal. And, it is important to come to some conclusions early on because how you proceed in the present can have everything to do with what you intend to do later on.

For an example, let’s say that you have one child, a daughter, and she has made a career out of working in the family business. She would like to continue on after you retire or pass away and eventually give the business to her children.

In a case such as this, you may be quite proactive about reinvesting in the business to solidify its underpinning for future generations. You would also have a pretty simple and direct situation regarding who gets the business.

On the other hand, let’s assume you have more than one child. Perhaps one of the children is involved in the business and the others are not. To provide for everyone equally you will have to do something to balance inheritances when you are planning your estate. This can oftentimes include the purchase of life insurance.

If you did not want to keep your business in the family at all and you intended to sell it to finance your retirement you may manage the business differently. And if the business was entirely dependent on your skills as the owner and of little value once you move on another type of situation would exist.

The wise course of action is to create a succession/exit plan and act with your future intentions in mind. Should you be interested in doing so, the first step is to sit down and discuss your vision with a licensed, experienced Sarasota estate planning lawyer.

Co-Executor, PLLC is a member of the American Academy of Estate Planning Attorneys.

When you work for someone else all your life, estate planning is fairly straightforward. For the most part, the facts are all sitting in front of you. But for small business owners, this is usually not the case. You have another dimension to consider when planning your estate due to the uncertainties that come with having invested so heavily in your business.

Here’s the challenge: estate planning for small business owners involves anticipating the future from a long ways off. You need to come to a decision about what you intend to do with the business as soon as you can. Because that decision will have an impact on the way you proceed each step of the way as you grow the enterprise.

For example, if you are going to pass the business on to the next generation, you may invest more money in infrastructure and equipment than you would if you knew you were going to sell the business.

And if you do want to keep the business in the family, it’s wise to identify your successor / successors early on so they can be fully prepared when it’s time to take over the reins. This is very important because only about 30% of family businesses survive this generational transition.

So to improve your chances of a smooth hand off, decisions about your business’ future should be made with input from the successors long before the transition arrives.

Once a final plan is in place, you can then start making choices that maximize the value of the business as you work toward achieving your estate planning goals.

Co-Executor, PLLC is a member of the American Academy of Estate Planning Attorneys.