As a small business owner, you've got a lot on your plate. However, estate planning is one chore you simply can't put off. Without proper planning, you risk jeopardizing your family's financial security as well as the future of the company you've worked so hard to build.
Start With the Basics
Like any other professional, your estate plan should include these key elements:
- Will. Your Last Will and Testament is used to name an executor of your estate, choose a guardian for your minor children, and discuss how you want to distribute your assets.
- Trust. In addition to your will, a trust may be needed to avoid probate and reduce tax liability.
- Power of attorney. You need to choose a person or persons to handle your financial and medical decision making if you become incapacitated due to injury or illness.
- Living will. A living will address any specific wishes you have about end-of-life medical care, such as preferences for pain relief and whether you want to be placed on life support.
Keeping Your Business Within the Family
A common concern among small business owners is keeping a family-owned company within the family bloodline. If you leave your business to your adult child directly, the asset can become jointly owned by them and their spouse under marital property laws. If your child were to later divorce, the portion owned by their former spouse could end up being shared by a new spouse and eventually passed to any children the new couple shares.
Careful use of trusts and other asset protection tools can ensure that ownership of your business remains in the family bloodline, but it's essential to plan ahead. Quraishi Law Firm & Wealth Management's experienced team can answer any questions you may have about the best way to accomplish this goal.
Providing a Fair Inheritance to Children Who Aren't Directly Involved in the Business
If you have more than one child, it's likely that all of your children have different levels of involvement in your business. This can complicate your estate planning since you'll need to create a way to provide each child with a fair inheritance.
At Quraishi Law Firm & Wealth Management, we can help you create a succession plan to turn control of your business over to heirs with direct involvement in day-to-day operations while still providing compensation for those who've chosen to pursue a different career path. This approach will minimize conflict between family members while ensuring your business continues to operate smoothly.
Reducing Tax Liability
If you're worried about your legacy being lost to unnecessary taxes, planning ahead is the best way to reduce the burden your heirs will face. Strategies such as making yearly gifts to family members, creating a trust, or planning for charitable donations can help minimize your total tax liability so you won't pay any more than what is legally required.
For many small business owners, this business is their single largest asset. You can count on Quraishi Law Firm & Wealth Management to investigate every possible savings strategy, so your heirs are able to keep more of what you've worked hard to earn.
Ensuring Necessary Liquidity
In many cases, small businesses have limited liquidity. However, it's important to consider that your heirs may be facing significant estate taxes after your passing—as well as their everyday living expenses and any end-of-life costs related to your medical care or burial.
Securing disability insurance, long-term care insurance, and life insurance, as well as the appropriate lines of credit, can help ensure the liquidity to meet immediate short-term cash needs. This will prevent your family from having to sell assets at a loss or layoff longtime employees to make ends meet.
Our Team Can Help You Plan for a Lasting Legacy
As a successful business owner, you know the value of seeking expert guidance that leaves you free to focus on doing what you do best. Quraishi Law Firm & Wealth Management's innovative approach brings proactive tax planning, wealth management, estate and asset protection planning, and business planning legal services together in one convenient location to meet all of your legal, tax, insurance, and investment needs. Let us create a customized estate plan that will provide you with the peace of mind you deserve.
Our estate planning attorneys are available at our Jonesboro and Little Rock office locations to serve clients throughout Northeast and Central Arkansas. We are also available to meet with clients in our Memphis, Tennessee office, so don't hesitate to contact us to set an appointment to discuss how we can best be of service.