It’s not the first thing most business owners think of. Running and expanding a successful company is more than a full-time job. Every day is a new challenge and a new opportunity. What comes after can be hard to see, much less plan for. Those days will come – and the time to be ready is now. This is where professional assistance is invaluable. Estate planning for business owners needs the detailed knowledge and full-time focus that dedicated planners provide.
Taggart & Partners have been serving Brisbane’s community of medium and small-sized businesses for many years, as a business accountant, tax specialist, and business advisor. Client success is our success. Contact us today, by calling (07) 3391 1188, e-mailing enquiries@taggartandpartners.com.au or getting in touch online.
Estate Planning Considerations for Business Owners
Significant Thought is Required
Estate planning is never to be considered causally, especially when a business is involved. There are many different approaches to estate planning. In any particular case, some may be much better than others, and especially in estate planning for business owners they can be subject to considerable scrutiny by legal and tax authorities.
All estate planning strategies have similar intent – to transfer the assets you’ve accumulated in life to those you designate, in an efficient and trustworthy manner. This will occur after your death or may be initiated by a medical or other event in which you might become incapacitated. There is great peace of mind in knowing that your intent and wishes will be carried out even though you are not present to oversee the process.
More Than Just a Will
While a simple will may serve adequately for an individual with limited assets and life scope, that is not typically the case for someone running a business. They are likely to have more substantial assets, of which the business itself is a primary component.
One of the more serious estate planning considerations for business owners is that the business must continue in the absence of the owner, so it can keep providing for the owner’s family and loved ones – whether it remains in the family or is sold on. Certain documents can assist. Some of these may be:
- Detailed wills that may include family trusts.
- A power of attorney to delegate decisions regarding personal and financial issues to someone you trust.
- An advance care directive, so your wishes are followed if you become seriously ill.
- Designation of an individual to be a medical decision maker.
Who Actually Owns What
It is very important to know and understand the exact nature of ownership of business assets. This is significant in life and becomes more so after an owner dies or is incapacitated. The question of ownership can be troubled in unanticipated ways. Others in management or in the owner’s family may not be fully informed as to what extent assets may be controlled by outside parties, such as a leasing company in the case of vehicles and machinery, on up to the business itself if other people or legal entities have a stake in it.
Assets may have been jointly owned by the business owner and someone else. In this case, both are considered full owners – it is not a percentage split of ownership. If one of the joint owners dies, by law the asset reverts to the surviving owner. Joint ownership cannot be passed on through a will.
If business assets have been owned by a trust, then control is held by officers of the trust. The business owner will have been one of the trust’s officers. Upon the owner’s passing, this office and its powers and responsibilities will go to someone designated by the trust. This must be decided and put in place beforehand to ensure that control goes according to the owner’s wishes. A trust office, or assets owned by a trust, cannot be transferred or distributed with a will.
It is Never Completely Easy
The situation can be surprisingly complicated. A clear view of the business and its relationships, and good records made in advance, will considerably simplify what is bound to be a troubling time after a business owner’s passing. The experience and resources of professional business and estate planners will come into play before and after, to smooth the way for those the owner worked with, and those the owner cared most about.
We’re Here for You
Look to Taggart & Partners for trusted consulting on estate planning for business owners, including asset protection strategies and transition management. We are reliable partners for so many great medium and small-sized companies in Brisbane and beyond. Let us demonstrate what we can do for you and your enterprise. We’re just a call away. Reach us on (07) 3391 1188, by e-mailing enquiries@taggartandpartners.com.au or by getting in touch online.