Estate Planning for Small Business Owners in Arizona and New Mexico
One of the biggest issues you face as the owner of a small, closely held business or farm is what will happen to your enterprise after you die. Have you planned appropriately to cover all of the issues that may come up?
At Morris, Hall & Kinghorn, P.L.L.C., we have the legal and practical experience to protect small businesses and farmers. People come to us for complete estate preservation, financial planning and accounting services.
Estate Planning for Your Most Important Asset
For farmers and small business owners, the family enterprise is usually the most significant asset in the estate. If you have more than one child, how will you divide up the farm or business? Who will own it and who will run it? If one child is more involved in the business, how can you be fair to him or her or to the siblings?
If you don’t have a proper business succession plan, the result can be unhappy family relationships and lost business value after you are gone. One way to protect the enterprise and be fair to your children is to place the farm or business in an entity such as a limited liability company or a family limited partnership. That entity can then be titled in a trust with all of your children as beneficiaries.
If family members do not have the background and experience to run the business, your succession planning can include strategies to have key employees continue on with the company in a management role.
Tax Planning for Small Businesses and Farms
Estate taxes and inheritance taxes hit the heirs of small business owners and farmers harder than other people. Taxes are normally due in cash nine months after the death of the owner. If your assets are invested in a farm or business, your beneficiaries may have to sell part of the enterprise or borrow money to pay taxes. Forced liquidity can become a devastating issue.
Placing assets in a proper trust also provides protection from probate, taxes, creditors, ex-spouses, personal bankruptcy and spend-down for long-term care.
For more information about estate planning for small business owners in Arizona and New Mexico, contact us to schedule a consultation with an experienced lawyer today. Our offices are located in Phoenix, Tucson, Albuquerque and communities throughout Arizona and New Mexico.