Leading Estate Planning Attorney Ana M. Veliz, founder of the Law Offices of Ana M. Veliz, P.A. in Coral Gables, FL warns us about the real-life issues related to the transfer of the company to the next generation. For more information please visit https://velizlaw.com
Coral Gables, Florida, United States - June 29, 2023 —
Succession is one of the most talked about TV shows of the 2020s, but planning a smooth transition of a business for the next generation could be fraught with real-life issues, said Florida Estate Planning Attorney Ana M. Veliz.
For more information please visit https://velizlaw.com
The Founder of the Law Offices of Ana M. Veliz, P.A. in Coral Gables, revealed that owners who failed to discuss the handing over of a family business with loved ones were storing up trouble later down the road if they become incapacitated or pass away.
She said: “For many families, the family business is the main asset. Yet there could be obstacles related to the transfer of the company to the next generation, a key employee or a sale to a third party.’’
“Some entrepreneurs may not want to consider what happens to their business, but they need to consider scenarios if they become incapacitated or die. What happens, then? What will happen to those that currently benefit from the business? Will their children be willing to pick up the baton and carry on the business?”
One of the best options is to create a succession plan that addresses transfer issues and the future of a business. This would include training and support of identified successors and delegating responsibilities and authority to successors.
“The secret success of any plan is for an owner to have important, open and transparent discussions with those around them. Relatives, business partners, and even trusted employees need to know what the owner plans in case anything happens to them,” she added.
If the future of the business points away from the younger generation, then an owner should seriously consider alternative options. She added: “Entrepreneurs should consult an attorney skilled in business success plans as they will be best placed to answer all their questions from tax and legal standpoints to smooth transition.’’
“An ownership transfer requires several planning considerations, such as coordination between who will own and who will manage the business, timing of the handover, and the best interests of the family and the business.”
Veliz added that owners must address the impact of partners passing away during the business and what happens then. “The value of a business may grow between when a person plans an estate and when they pass away. Then, it may be advisable to implement advanced planning such as a freezing technique that allows for the value of the business to appreciate outside the value of an estate to minimize the impact of estate taxes.”
If the business has one or more co-owners, an agreed plan needs to be in place. She explained: “Establishing an agreement can ensure that upon the death of any owner, their interest is automatically purchased by any additional owners providing cash for your loved ones.”
If the business is to be run alongside a partner’s spouse or children, buy-sell agreements could come into play. An agreement is legally binding between co-owners that governs the situation if a co-owner dies, is forced to leave or chooses to leave the company.
“An agreement with partners and family members can provide a plan and structure in case of incapacitation or death. An efficient business structure and succession plan will help minimize liability exposure and solve income, estate and asset protection issues,” said Veliz.
She said that as part of a succession plan, business owners could transfer the business assets to their children but retain a source of income for themselves by establishing a grantor-retained annuity trust.
“Business owners must consider exit strategies in life and at death. Attention to all the many options and their potential impact on estate and succession planning will act as the glue to keep all the various pieces integrated and working together,” Veliz added. “While the present is important, owners must be prepared for the unpredictability of the future.”
Source: http://RecommendedExperts.biz
Contact Info:
Name: Ana M. Veliz
Email: Send Email
Organization: Law Offices of Ana M. Veliz, P.A.
Address: 2600 S. Douglas Road Suite 710 Coral Gables, Fl 33134
Phone: (305) 703-5198
Website: https://velizlaw.com
Release ID: 89100756
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