Succession of Family-Owned Businesses & Farms
Our estate and business planning group have the necessary knowledge and experience to help with the unique needs of family farms, ranches, and other businesses and providing for their succession for future generations. As more Americans become entrepreneurs, they learn that wise business planning is essential to their success today and their financial security tomorrow. Our law firm can help you achieve your goals, whether your business is a one-person operation or one striving for a place on the Fortune 500 list.
- Buy-Sell Agreements: Creating a buy-sell agreement can help you achieve tax advantages and control with respect to your family business. Equally important is the peace of mind that you will gain when you know that your spouse and children will be well provided for and your legacy will be passed on in a highly structured and cost-efficient manner.
- Family Limited Partnerships and Limited Liability Companies: The formation of family limited partnerships and limited liability companies for family owned businesses can help provide: liability protection for other assets; for centralized management of family-owned business and investment property; and for the orderly succession of such businesses through lifetime and post-death transfers to family members.
Family business owners, farmers, ranchers and landowners face unique challenges surrounding how to preserve the family business. Sadly, a large majority of family businesses do not survive the transition to the next generation.
The typical family with a farm, ranch or other family-owned business is land rich but cash poor. With funds locked up in equipment, livestock, structures and land, the net worth may be impressive. But when you look at the cash flow, it is an entirely different story. Estate taxes are based upon the fair market value of your assets at death. If your heirs can’t readily raise the cash from other sources to pay those taxes, they may have no recourse but to sell the farm just to pay the estate taxes.
Your family-owned business poses two primary estate planning challenges:
- How can you preserve it from estate taxes so that you can pass it on intact to the next generation? and
- How will you equitably distribute it among your heirs?
Achieving these two goals means planning in advance for such expenses as estate taxes, as well as implementing strategies that give you maximum control over how, when, and to whom ownership of your business transfers.