Should I Leave My Business to a Family Member? Part 1
If you have created a successful company and are considering an exit strategy, many business owners elect to pass that business on to a family member. Family business transfers are a common type of ownership transfer that an estate planning attorney in Tampa can assist you with. In this two-part article, we will weigh the pros and cons of family business transfers to help you determine whether or not one is right for your business.
Keeping Your Business in Your Family
There are many benefits to transferring your business to your children (or another family member). Whether it’s the satisfaction of providing a great employment opportunity to your child or keeping the business you built in your bloodline, there is incredible value in keeping the family tradition of owning a business alive. Depending on your financial status and whether or not you have a responsible family member prepared to manage the company, leaving your business to a family member may be right for you.
Benefits of a Family Business Transfer
Here are some other benefits of passing a business on to a family member:
- Ownership Control: For business owners that are not certain of whether or not they want to outright leave the business, you can tailor a specific strategy to your situation that allows you to retain control of the company until you feel like it’s time to move on. This can ease the business owner into the retirement phase of life. Moreover, you can plan a long-term financial strategy that is structured around this transfer.
- Trust: When you perform a family transfer, you know the strengths and weaknesses of your successor. You can also mentor your family member over time and make certain that the business has been left in good hands. There’s also the reassurance of knowing that you are passing the company on to a trustworthy person that you have groomed to one day take over control. Many prefer this over taking the risk of selling the company to a third party owner with unknown intentions.
- Asset Control: Often referred to as “retention planning,” leaving a business to a family member allows your family to retain control of the assets. Along with creating an estate plan, there are many ways a succession planning lawyer can help minimize taxes on your estate during an ownership transfer.
For more information on whether or not you should leave a business to a family member, please read section two.
If you would like to speak with an estate planning lawyer in Tampa, please contact us today.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.