Selecting the most appropriate entity (Company, Limited Liability Company, Limited Liability (“Family”) Partnership, etc.) is important for both Wealth Transfer planning and overall estate planning for individuals and their family. Once formed, such entities can be gifted or sold to family members outright or in trusts, providing asset protection, reduction in federal transfer taxes and planning in advance for future changes in family circumstances.
A staggering percentage of inherited family wealth (including family businesses) is exhausted prior to the death of the wealth owner’s grandchildren! Strategies are available to plan for the orderly and tax-advantaged transfer of family businesses through successive generations following the original owners’ deaths, or by way of lifetime transfer of part or all of the business. In addition to protecting the business from adverse consequences upon an owner’s death when the business makes up a significant portion of the owners’ estate, such planning also provides for uninterrupted management of the business upon divorce or disability of an owner. The benefits of many wealth transfer strategies may also depend upon thoughtful business continuity planning. As with other planning techniques, planning for business continuation relies upon professional advice from an individual’s tax, investment and insurance advisors in addition to that provided by his or her estate planning legal specialist.