Law Office of Amy B. Van Fossen, P.A. - Elder Law

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Why business owners need an estate plan

For a Florida business owner, an estate plan can provide valuable peace of mind. At some point, the owner may pass or otherwise want to exit the business. An estate plan will also be useful if the owner of a company becomes incapacitated and someone else needs to run the organization. If an owner already has an estate plan, it’s a good idea to review it from time to time.

Estate holders should periodically make sure that their documents meet their needs and comply with state laws. Basic estate planning tools include wills and trusts. A will provides instructions as to who should receive business assets when the current owner dies. Trusts may be effective if a beneficiary is a minor when a property owner passes on.

One primary benefit of creating an estate plan is tax reduction. Currently, each person is allowed to exempt up to $11.2 in assets for federal estate tax purposes. A 40 percent tax rate applies for amounts of more than $11.2 million. In many cases, proper planning will allow an individual to reduce estate or inheritance taxes on the state level as well.

The loss of a loved one can be a tragic event. It may be even harder to go through if there isn’t a clear plan as to what happens to that person’s assets. Those who wish to transfer assets to future generations can benefit by engaging in estate planning today. In addition to creating a succession plan, business owners could keep estate taxes or those owed by beneficiaries to a minimum.