Estate planning is important for all residents of Maryland, but it is especially so for small business owners. This is because it is not only the business owner's heirs and beneficiaries that benefit when the family-owned business is successfully passed down between generations, but the very viability of the business itself could also be at stake.
Many questions will need to be considered when it comes to estate planning and the family business. Sometimes, it is best for the business to be sold after the owner retires or passes away. In other cases, a person would want to see their childrencontinue on as the owners and operators of the business. The details become even more nuanced if more than one individual owns the business.
Nevertheless, according to some experts not very many family-owned business are properly passed on to future generations. It may be that one's children or grandchildren simply are not able to successfully run a business. Disputes could also arise between co-owners that cause issues for the viability of the business. In certain circumstances, estate taxes could also be an issue.
One option business owners may consider when it comes to estate planning is a buy-sell agreement. In this type of scenario, once the business owner passes on, his or her estate will be granted the fair value of the ownership shares in the estate. This method may utilize promissory notes or life insurance policies.
In the end, it is important for business owners to think about what will happen to their business after they die. They do have options for passing it on, and should keep in mind not only what is best for their beneficiaries but also what is best for the business itself.