Updating estate plans need of the hour for family business owners
Family business contribute over 70 percent of global productions, but owners of them don't update their estate planning. It's estimated that over 50 percent of family business owners didn't update estate planning for more than five years. Perfect and updated family planning ensures the smooth transition of a property from one generation to other while exploiting many tax benefits as well, advise experts.
The majority of family business owners doesn't update their estate planning. Over 50 percent of the family business owners didn't take a look at estate planning for over five years. It's estimated that only 22 percent of family business owners updated their estate planning during the past two years. 25 percent of owners updated in less than five years, according to a recent global survey on family business owners' estate planning.
The principal creators of wealth are family business owners. The family businesses contribute over 70 percent of global production. Estate planning plays a vital role in the perpetuation of a family business. Considering the rapid change in business dynamics, estate planning is essential these days, advice estate planning experts.
Estate planning becomes old or outdated after few years. Adding to this, circumstances in families and relations among family members, business matters, net worth, etc, tend to change anytime or over a period of time. Here estate planning comes into the picture.
It doesn't matter how complex an estate planning is. It's better to get a customized estate planning as long as one's legally competent. It'll also ensure safe passage of family business from one generation to other without any dispute that may further damage the prospects of growth.
Up to date, estate planning is also useful in offloading family business for a fair price deal. Understanding the business management philosophy is essential while preparing estate planning and more particularly when the business transition is taking place.
Several academic institutions are offering courses on estate planning. For instance, American Law Institute is offering estate planning course CLE program for those who represent family business owners. It provides right from estate administration, updates on transfer planning, current income tax, trust advisors, trust protectors, dealing with intra-family rivalries in succession planning, etc.
Academicians and legal experts find that many family business owners lack awareness about even charitable planning and charitable gifts as well. Over 50 percent of the family business owners are not exploring the options involved in tax benefits,
Some family business owners may not take advantage of several options to avoid the estate tax, gift tax and other taxes legally. This happens out of ignorance or negligence. Hence, it's wise to review and refine the existing estate plans.
Many family business owners realize that they're richer than when their estate planning was drawn up. Family business owners depending upon their state and federal laws can have updated estate planning to not only enhance value but also add protection as well.
Estate planning is essential for the inheritance to control the assets and minimize the tax imposed by State and Federal government. It's process of legally structuring the future disposition of current and projected assets.