Minneapolis, MN estate planning attorney Cameron R. Kelly discusses important issues business owners should be aware of when planning their estate.
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Yes, businesses make estate planning more complicated and a lot of business owners don’t give a lot of thought to their succession plan or how they’re going to sell the business while they’re still alive and if something does happen that can be a mistake. It’s pretty understandable given that running a business is a busy thing and it is a full time job running the business but at the same time, a business owner should be thinking about some of the key ways of transferring their business while they’re still alive. Examples of that might be thinking about key employees that work for you and those employees might be people you could sell the business to or they just might make the business easier to sell to someone else.
Other things to consider would be if I pass away who would be able to run this business. A lot of times, you see fire sales of businesses where someone has passed away and it needs to be sold in a real quick or expedited manner in order to try to get anything that you can for the business. That’s not the way you want to go about trying to sell a business. Instead, what you should be doing or trying to do is think about it ahead of time, think about who might be a potential purchaser, having agreements between different shareholders of the business and planning for that ahead of time.
The other big thing that can be an issue for a business owner is when they want to pass the business to their kids and in those cases, the questions might be how do you transition a child into your business o which kid should be part of the business. Maybe some of them are suited to it and others are not and then, in those cases how am I going to equalize things or at least make things fair for the people who wouldn’t be coming into the business.