Owners of family businesses face challenges when preparing their estate plans. We have been doing estate planning for owners of family businesses for over 25 years.

We have been doing estate planning for owners of family-owned businesses for 25 years. We know that family-owned businesses face challenges when one or two children have chosen to work in the business. Sometimes there is preferential treatment, either with economics or voting and control of the business.

As estate planning lawyers, we can serve as sounding boards in creating a balance between what will be best for the business and what will work to maintain peace and cohesiveness in the family. With experience in guiding families through this process, we are able to provide an unbiased view and can be helpful when hard decisions need to be made.

Another part of the plan is having the family and the estate planning lawyer meet with other professionals, such as a wealth manager and CPAs. This is especially helpful when the owners are reluctant to talk about what is happening in the business with their children, before clarifying their own thoughts about the business. Taking time to step back and gain some perspective before holding a family meeting where decisions are made will give the owners more clarity.

A succession plan often starts a business plan. Once there is a plan for the future of the business, it’s an easier transition to financial and estate planning. Taking these steps can help the business be successful. Any business will run better when the numbers and projections for future growth are in place. Banks and other lenders look favorably on a company that has its financial reports in place.

This also permits tax planning to be done properly. In some cases, transferring a business or other asset while the owner is still alive can be beneficial in the long run, even with today’s higher federal estate tax exemptions.

To transfer the business to one or more children and give them an opportunity to succeed on their own, through their own efforts, consider bringing them in as a responsible manager with some ownership.

It’s challenging enough to run a small business from day to day, much less to plan for the future. In the back of every business owner’s mind they know that, like it or not, the day will come, if they’re lucky, when they will decide to retire from the business and either dissolve it or sell it. But if they are not so lucky, business owners may become incapacitated or unexpectedly die before they are ready to give up control of their business. All of these scenarios require advance planning and legal assistance. Otherwise, it’s a failure to meet critical responsibilities to employees, other owners of the business, clients/customers, and family members who may be counting on the value of that business as a needed asset. At our law firm, we stand ready to listen to your goals surrounding business succession, and to provide legal support as it relates both to your business and also to estate planning.

If you have questions about passing on your family-owned business to the next generation, give us a call at 253.858.5434 to see how we can be of service. We represent clients throughout Washington and Idaho and are available to meet in person, by phone, or via video conference.