Estate planning is all about family. Your Will gives your family guidelines about distributing your assets and may provide much-needed financial support after you are gone. Business, on the other hand, may not seem like much of a family affair. However, some families do own and manage at least one family business. Many don’t realize there’s a connection between a family business and your estate plan.

Estate Plan Fundamentals We Should Know

Every adult needs an estate plan. A simple estate plan may include the following documents:

  • Last Will and Testament;
  • Durable Power of Attorney;
  • Healthcare Power of Attorney; and
  • Living Will.

Some estate plans may use trusts. How your assets are titled makes a difference in your estate plan, as well as how you complete beneficiary designations on your financial accounts.

You and Your Family Business Are Not Alone

According to SCORE, a family business is any business owned by two or more family members that the family controls. Family-run businesses account for 19 percent of the 28.8 million U.S. small businesses. They also serve as job creators, employing 60 percent of our workforce.

Even strong family-owned companies run into trouble when it comes to longevity. In fact, only about 30 percent of family businesses make it to their second generation.

One of the biggest factors that may determine a company’s future success is the estate planning of its owners.

Family Business and Your Estate Plan

Some of the estate planning tools you may use to protect and support your family business include:

  • Revocable and irrevocable trusts;
  • Life insurance policies that provide liquidity to your business;
  • A Last Will and Testament;
  • Wealth-transfer planning;

A typical business owner may have a buy-sell agreement in place or some other type of succession plan. Family businesses can be a bit more complicated. Choosing who will run your family business is not always an easy task. Family members sometimes become emotional or possessive about family businesses, which is all the more reason to have a good estate plan in place.

Is Your Family Business Ready?

Hire an experienced Alabama attorney like Bruce Adams.

He knows how to handle his clients’ legal questions and concerns. Please contact Bruce at 256-237-3339 to set up an appointment or use our convenient Contact Form. Our office is located in Anniston, Alabama, but we assist clients in surrounding Calhoun, Cleburne, Etowah, and St. Clair Counties.

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