What do Business Entities Have to do With Estate Planning?

The Business of Estate Planning

People who own business entities, like Corporations, LLC’s and Limited Partnerships NEED Estate Planning. Often estate plans are set up completely detached from business entities.  When business entities are not integrated into the estate plan, it can cause problems with family members, partners, business operations, and the ultimate value of the business in the estate.

As an estate grows, business entities typically become some of the most powerful and valuable assets to pass on to future generations. If there is no business entity at first, it often makes sense to create one to grow the estate value, create tax efficiency, manage risk, and optimize fractional ownership within the multi-generational estate. It is important to set up business entities so that multi-generational ownership does not disrupt control of the company and its continued viability.

How the business entity is set up and owned within the estate plan will determine:

• How it is taxed
• If there will be a tax at the time of the founder’s death
• If it will be vulnerable to litigation or other liabilities

All of these factors need to be explored and planned for to ensure that the business entity remains a viable asset for the family for years to come.