Like many owners of closely held family businesses, you’re likely working hard every day to sustain your business and help it thrive through always-changing economic conditions. The last thing you are focused on is how you will preserve your wealth and transition your business to future generations.
The United States is a land of family-owned businesses. These start-up and do-it-yourself enterprises make up between 80 and 90 percent of all companies in the United States, according to the Family Firm Institute. And yet, many smart, capable business owners lack a comprehensive succession plan that addresses the various issues that will crop up when they leave the business for retirement or other reasons, including sudden illness.
In a perfect world, creating and implementing your estate plan would be a straightforward process. Your intended distribution of assets would meet your goals and your family would see the plan as equitable to everyone.In reality, however, developing an effective estate plan can be a challenge both emotionally and financially. For example, you may own an illiquid asset that comprises a large part of your estate, such as a closely held business or income-producing real estate.