Estate planning is important for anyone in terms of providing asset protection, smooth transfer of assets to family members, minimizing costs for estate administration, tax avoidance and more. If you own a family business, estate planning can be more complicated because your estate plan will need to address how your business will continue to operate without disruption if you die or become incapacitated, business succession issues and provision of financial benefits for you and your beneficiaries. Small business owners may wish to discuss these special estate planning arrangements and issues with their New Mexico Estate Planning Attorney.
Creating a Succession Plan:
Succession planning is a critical aspect of any business plan especially for small family owned businesses. The plan will spell out your intentions for the transfer of the company to your successors. The succession plan may provide for a seamless transition for the company if you should pass away and provide a mechanism to facilitate your retirement from the company.
Taking Advantage of the Benefits of a Family Limited Partnership (FLP):
This type of estate planning asset protection tool provides a way to remove assets of your business from being part of your taxable estate by transferring the value of the asset to your kids. Even though this transfer of assets occurs, you are able to maintain control of the business. This type of estate planning tool must be set up correctly to avoid unintended consequences so it is important to contact an experienced New Mexico Estate Planning Lawyer.
Effective Drafting of a Buy-Sell Agreement:
This document is a contract executed by partners in a business that indicates how the death of a partner is to be handled by the remaining partners and/or heirs of the partner. The buy-sell agreement can establish the price at which ownership shares can be purchased from family members and even prevent specific parties from acquiring an ownership interest in the business.
While these are documents that are specific to your business interest if you own a family business, this does not make other types of estate planning documents less important. Business owners and entrepreneurs still may want to consider getting New Mexico Estate Planning Advice about advance medical directives, power of attorney documents over financial matters and estate succession planning documents like wills and trusts.
The above information is designed solely to illustrate general principles of law, and does not constitute a specific legal opinion on individual cases. We suggest that you contact experienced legal counsel for a specific opinion tailored to your individual circumstances.
If you have an ownership interest in a business, you should contact a New Mexico Estate Planning Law Firm to discuss any business succession issues that could adversely impact your loved ones or the business in the future. We invite you to talk to one of our experienced New Mexico Estate Planning Attorneys at Jay Goodman & Associates. Call us today to schedule your free consultation at (505) 989-8117 to learn about your options.
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