Today’s topic of discussion will be estate planning tips for small business owners. If you’re a small business owner, you should be proud of yourself. It takes ambition, courage, organization, and financial literacy to go into business for yourself. Quite frankly, the logistics of being a small business owner can be overwhelming, particularly when it comes to estate planning. Some people are fully aware of how they feel about their family dynamics and whose future they want to secure.
However, business matters can be more complicated. Ironically, business matters might be even more challenging if you own a family-owned business. Nonetheless, mapping out your legacy by deciding what will happen to your business is worth the time and investment. Here are some estate planning tips that small business owners can appreciate.
Estate Planning Tips: Create a Will and Simple Estate Plan
As a small business owner, a will outlines the distribution of your business and other property. Secondly, a power of attorney appoints an individual to manage your finances and undertake business transactions if you become incapacitated. In addition, a healthcare directive designates an individual to make medical decisions on your behalf. Without a will, the Florida Intestacy Statutes will control the distribution of your business.
Ask Millman Law Group About Tax Planning
Tax laws, when it comes to estate planning, are constantly in flux. Quite honestly, this might be an ongoing conversation between you and us. While Florida doesn’t have a state tax, the federal government does levy an estate tax. This tax comes out of your estate before beneficiaries receive their distributions. The federal estate tax rate starts at 40%.
However, as of 2021, the estate tax exemption in 2021 is $11,700,000, leaving a lot of businesses in the clear. However, you also must consider how much of your assets come from a 401K, IRA, or other retirement accounts. With the proper estate planning, you can minimize estate/inheritance taxes.
A Note for Family-Owned Businesses
You might think it’s a nice gesture to split up your business evenly between all your children. However, this can backfire, mainly if all of your children don’t get along. It’s not a bad idea to grant all business assets to one child and leave the remaining assets to another. You also have to consider marital property laws because when you bequeath business assets to a child, their future spouse may have joint ownership. However, there are ways to keep your business in the bloodline if you plan your estate carefully. In addition, if you want your spouse to profit from the company and have a salary, creating a trust might be ideal.
Does this information sound complex? Well, estate planning shouldn’t be a DIY project! If you leave estate planning to our professionals, your future will be in good hands.
Estate Planning Made Easy
Millman Law Group, PLLC is rare because it’s one of the only law firms that offer life planning in South Florida. From life care planning to the preparation of detailed estate plans, Millman Law Group has committed to serving Floridian elderly communities in Boca Raton, Palm Beach County, Ocean Ridge, Hillsboro Beach, and many other areas since 2018. Our dedicated team also specializes in special needs trusts and catering to any age demographic because we know for certain it’s never too early to start preparing you and your family for your future. For the latest news in estate planning and elder care law, follow us on Facebook, Twitter, Linked In, and Pinterest. You can also contact us at 561-463-6480.