Small business owners’ work and personal lives are often closely intertwined. If you are the owner of a business, you know that the work never stops, and you are never off the clock.
After spending so much of your life pouring your heart and soul into your business, it is important to set aside some time to create an estate plan that factors in your business.
The first thing to consider in the estate planning process is creating a will that details how you would like your business to be divided upon your passing. If you want to keep the business within the family, you will need to plan for that.
This would involve having a discussion with your family to decide who will take over for you, and then decide how the rest of your assets will be divided to make it fair for all members. You wouldn’t want there to be conflict among them during an already difficult time.
It is also a good idea to come up with a succession plan. This is a document that states how your business will continue to operate in your absence, or how it will be prepared to be sold. It starts out like a normal business plan with general background information but goes on to detail the overall state of the business’s finances, how the structure of the business might change after you’re gone and changes in personnel and their compensation, among other things.
One good thing about being a small business owner in Ohio is that there is no estate or inheritance tax on the state level. This means that the beneficiaries of your estate will receive the full value of the estate and will not have to pay any additional taxes on their inheritance. The federal government does, however, levy an estate tax of 40%, but this only applies to businesses worth more than $11,180,000—leaving most in the clear.
Estate planning is admittedly not something most people look forward to if you have both your family and business to be concerned about. If you need help creating an estate plan that works for you and your business, an estate planning attorney can help.
