Business and Succession Planning
One of the most rewarding experiences a parent can have is to hand over a successful business to a son or daughter and have your child follow in your footsteps. It is incredibly satisfying to know that you have left your children a legacy of hard work and dedication, as well as a valuable, thriving asset.
Did you know that family run businesses comprise 80-90% of total business enterprises in the U.S., but little more than 30% of those businesses will survive into the second generation, 12% into the third generation, and only 3% beyond that? In spite of these staggering statistics, less than 30% of family run businesses have a formal succession plan! One could argue that a good reason why family run businesses aren’t persevering is a simple lack of planning.
Even if you don’t plan to stop working anytime soon, there is always the possibility that you may be unable to run your business due to unforeseen illness or death. When you’re busy with the day-to-day operations of your company, it’s easy to dismiss this idea and tell yourself that you’ll “get to it later.” However, continuing without a business succession plan can be very risky. If you continue to own a business until your death, it will be included in your estate and could be subject to substantial estate taxes. Your family could also be forced to sell the business or its assets at “fire sale” prices. Failing to plan could mean that it is Uncle Sam or an outside party, not your family, who will ultimately reap the benefits of your years of hard work.
Early business planning can provide you with retirement income, reduce income and estate taxes, and even let you benefit a charity, regardless of whether you transfer your business to family members, employees, or an outside buyer. Our attorneys at Crandall Law Group have helped Idaho and Washington business owners design effective and beneficial business succession strategies that safeguard a successful family-held business transition. Contact Crandall Law Group today so we can help you keep it in the family.