Business Succession Planning in Alexandria
Business succession planning in Alexandria can help you create a plan for your business following your death. This can help you feel at ease knowing that the business you worked hard to build will be protected. A well-versed trusts and estates lawyer can help you better understand your options for protecting your business.
What is Business Succession Planning?
Business succession planning is planning for the future of one’s business, typically with the goal of minimizing tax consequences and taxation, and putting a strategic plan in place for who will own the business and who will manage the business when the current owner passes away. Business succession planning is also related to the owner’s personal estate planning, as a business is most likely a substantial asset of the owner.
Similar to all other assets, if the business is owned in the owner’s sole name rather than a trust, an LLC, or other corporation, the business will have to go through the probate process. This process will involve the qualification of an administrator or an executor depending on whether the person has a Will, and the value of the business will be subject to any enforceable creditor’s claims or debts of the estate.
The Importance of Creating a Plan in Alexandria
If a person owned a business, succession planning is essential to ensure that the taxes are minimized and that the business is not harmed as the result of the owner’s death. When creating a plan of succession, many different factors need to be considered such as:
- The current value of the business
- The projected future value of the business
- The needs of the business owner regarding the business’ cash flow prior to their death
- Who will manage the business after the owner’s death
Incorporating the Succession Plan into the owner’s Personal Estate Plan is central in ensuring that all applicable tax exclusion and exemption amounts are used for saving purposes. The estate-planning documents can also be crafted to appoint a Trustee or other fiduciary person to manage and operate the business. An estate-planning lawyer, with experience in business succession planning, would be in the best position to evaluate the business as a whole, as well as the owner’s personal estate plan and financial situation in order to integrate the succession plan of the business into the owner’s personal estate plan.
Simplifying Probate
One mechanism to simplify the probate procedure following the owner’s death would be to create a Trust during the owner’s lifetime. It would be set up in such a way that the Trust would essentially own the business and could include provisions relating to the management and control of the business. If the business is owned by the Trust, it would not be considered a probate asset at the owner’s death and would at that point be excluded from the probate procedure.
Usually, companies and financial institutions understand that if there is no joint owner or beneficiary listed on an account, the account cannot be accessed, changed or modified in any way unless an executor or an administrator is appointed by the court. Beyond this, financial institutions typically do not have enough experience with the probate process to have a broader understanding. Therefore, it is best to work with an attorney who is experienced with the probate process in the jurisdiction that the estate is located if one finds themselves in the position of going through probate with respect to a business.
Get Help with Business Succession Planning in Alexandria
It is never too soon to hire a lawyer to help with probate and business succession in Alexandria. It is wise to hire an estate planning lawyer who also has significant experience with probate, as this specific experience will help the estate-planning lawyer determine whether avoiding probate should be a goal of the business, and what plan might be the best for both the owner and the business. To get started, call today.