Family business contributes to over 70 percent of global productions, but owners of them don't update their estate planning. It's estimated that over 50 percent of family business owners didn't update their estate planning documents for more than five years. Perfect and updated family planning ensures the smooth transition of a property from one generation to other while exploiting many tax benefits as well.
A recent article in Money Times, “Updating estate plans need of the hour for family business owners,” warns that estate planning becomes old or outdated after just a few years. In addition, family situations and relationships between family members, business matters, net worth, and other factors can and will change anytime or over a period of time.
That’s why you need to have an estate plan review on a regular basis. Regardless how complex an estate plan is, it's better to work on a customized estate plan now. This will make certain that your family business passes from one generation to the next without disputes that may further damage its possible growth. In the alternative, estate planning can also be used to offload the family business at a fair price deal.
Many family business owners aren’t aware of charitable planning and charitable gifts. More than 50% of family business owners aren’t exploring these options and their tax benefits.
Because the tax laws change frequently, family business owners need to work with their estate planning attorneys and take advantage of any new strategies to legally avoid estate taxes, gift taxes and other taxes.
After speaking with an attorney, some family business owners find that they're richer than they thought once their estate plan is drawn up. Estate planning is critical for the inheritance to control the assets and minimize the tax imposed by both your state and the federal government.
Reference: Money Times (September 18, 2015) “Updating estate plans need of the hour for family business owners”