A new report highlights the importance of estate planning for family business owners of family businesses. The report notes that the recession of 2008 resulted in many laid off workers creating their own businesses in order to provide for themselves financially. The availability of the Internet and low-cost websites helped many of these smaller businesses thrive. Today, family businesses account for 50% of the gross domestic product in the United States. Similarly, 35% of Fortune 500 companies are private companies or are public companies that families control.
For all of these family business owners, creating an estate plan is essential. The report identifies five key issues that can be addressed through estate planning:
- Only a small portion of family businesses are able to successfully transition the business to the second generation.
- The interests of current owners and future owners of the family business may not always align.
- The question of how to value a business as ownership of the family business transitions to new owners can be controversial if it is not predetermined.
- Interfamily disputes can arise following a divorce, death, or marriage of an owner of the business.
- Estate and inheritance issues can result from probate court delays or estate taxes due upon the death of a family owner.
Clearly, business owners in California should strongly consider creating an estate plan. This plan may benefit from the use of a living trust, in addition to other estate documents. For more information, contact the experienced Anaheim trust attorneys at the Law Office of James F. Roberts and Associates, APC, for a consultation. Call our office today at (714) 459-5481.