Charleston Estate Planning for Business OwnerOur Charleston estate planning attorneys will often come across a growing business, or small business, and find that this business is the cornerstone asset for a client. That is why careful estate planning for business owner presents unique opportunities and challenges. While business owners will often seek to minimize the attached estate taxes with their business, business executives must also be mindful to long-term goals, such as business succession planning or creating a family limited partnership. Estate planning for business owner is intrinsically complicated. The involvement of business partners, family members and additional shareholders further conflates this issue. In some cases, the business may not be readily marketable which forces the business owner to select between a series of competing estate planning options. Our Charleston estate planning attorneys are experienced in focusing on the possibility of liquidity in these circumstances.

An added difficulty in estate planning for business owner arises in the form of the family interests of that business owner. The families of business owners often find it difficult to replace the income of a business on their own. In most cases, the business owner must plan for partial transfer of control and proprietorship of the business to the children while also making separate arrangements for the care of the spouse.  This balance can often be difficult to achieve, especially when the the replacement of key business employees are at stake as well. While some business owners may wish to provide equally for their children, it becomes difficult when some children are heavily involved in business operations and others may be somewhat removed.

As noted above, most successful businesses are owned and controlled by family members.  These family owned businesses create numerous estate planning challenges.  Business succession estate planning which addresses control or management is often a critically important and often highly emotional process for family members.  Frequently, these transitions are caused by the withdrawal or death of family members of the senior family generation.  These transitions, if not carefully planned and thoughtfully handled, can be extremely damaging to the family and its business.

Proper estate planning addresses the considerations mentioned above and many others, and allows the business to be transferred and maintained according to the business owner’s wishes. Through the use of a shareholder agreement, partnership agreement or operating agreements, business owners can facilitate a smooth transition and careful restructuring of the business in a suitable type of business entity. These agreements, if drafted properly, almost always contain specific buy-sell provisions to prepare for the formerly expressed complications of estate planning for the business owner.