On October 20, 2015

Estate planning can be a complicated endeavor for anyone. For business owners, however, considering what will happen to their business after they pass away – and taking the time to think about and resolve these issues now – can be the key to putting an effective, comprehensive estate plan in place for their loved ones and their business.

Estate Planning 101 for Business Owners: Important Issues to Consider

  1. Business owners, here are 4 things to consider when devising an estate plan, a Denver estate attorney explains. Contact us for help devising an estate plan.

    Business owners, here are 4 things to consider when devising an estate plan, a Denver estate attorney explains. Contact us for help devising an estate plan.

    The taxes – Did you know that, upon your death, your business will generally be considered to be part of your estate and that the so-called death tax on businesses is typically between 35 and 50 percent of the value of the enterprise? Clearly, this can end up being a significant tax burden for the business, often resulting in the need to sell it off ASAP to meet this bill (which is generally due within 9 months of the death).

    If effective estate planning has been done ahead of time, however, business owners may be able to mitigate this tax burden for their surviving loved ones, as they may be able to set up a plan for redeeming stock in the business or taking advantage of certain estate tax deferrals for small business owners (for instance).

  2. Life insurance – Do you and the business’ co-owners have life insurance policies on each other? If not, this can be another important step in estate planning for business owners, as having these policies can provide revenue that can be later used to buy a decedent’s interests in a business from an estate.
  3. Selling the business – If you do share ownership of a business with even one other party, another important part of estate and business planning can be to develop a buy-sell agreement, which essentially outlines of the terms for what happens when one owner passes away or becomes unable able to oversee the business for other reasons (like incapacitation).
  4. Business succession – When businesses are owned and operated by families (or others who are close), passing the business onto a successor (rather than selling it) may be far more preferable. This is where business succession planning can enter the estate planning picture. This type of planning can set up the terms for the smooth transition of a business into the hands of your chosen successor.

Contact a Denver Estate Attorney at JR Phillips & Associates, PC

For experienced help devising a comprehensive estate plan, contact an experienced Denver estate attorney at JR Phillips & Associates, PC. We provide a thoughtful, comprehensive approach to our clients’ estate planning and other legal needs, and we take pride in helping each of our clients and their families find the best solutions for them.

Let’s discuss your estate planning options during an initial consultation. To schedule this meeting, call us at (303) 741-2400 or email us using the contact form at the top of this page.

From our offices in Denver, we serve clients throughout the southwest and southeast Metro Area, including (but not limited to) people in Highlands Ranch, Littleton, Castle Rock, Parker, Aurora, Greenwood Village and Englewood.

Categories: Estate Planning