When you’re purchasing or selling a business, it’s easy to be overwhelmed by the details of the transaction and the transition process, and forget the impact that the sale or purchase has on your overall financial picture as well as your estate planning needs. The purchase or sale of a business always calls for a review of your estate plan, and may require some significant updates.
Buying a Business
When you’re just taking over a new business, it can be hard to look beyond your immediate to-do list and think about how you would like your new enterprise to transition in the event of your death or incapacity. If something happens to you, do you want your business to be sold? Would you prefer to have control handed over to a family member? If you don’t have a family member who’d be ready and willing to take the reins, do you have an employee who might want to purchase your business and continue to operate it?
Anticipating these issues now, while you’re alive and well, and making sure you have a succession plan in place can make all the difference both to your business and to your family. With a solid succession plan in place, there will be no questions as to your wishes concerning your business, and your family can be spared the potential for turmoil and conflict in your absence. That same plan can ensure that your wishes for your business prevail, and could mean the difference between an enterprise that passes away with you and one that continues and grows for generations.
Selling a Business
What if you’ve just sold a business? In this case, your financial picture has likely changed significantly. The structure of your assets has b, and been altered, and your net worth may have increased. You might need to fund the cash or promissory note you received for your business into your Revocable Living Trust to ensure that your estate plan still keeps all of your assets out of probate. If you and your spouse have an AB Trust, you’ll want to consult with your estate planning attorney to make certain that you and your spouse still have the appropriate balance of assets in order to fund that trust.
The purchase or sale of a business, like the birth of a child or a move to a new state, is a major life change that can have significant consequences when it comes to your estate plan. Your attorney can help you understand these consequences and adjust your plan accordingly.
- Thought of the Day - September 28, 2022
- Death and Your Digital Footprint - September 21, 2022
- Thought of the Day - September 21, 2022
