ESTATE PLANNING WITH A BUSINESS
Let’s talk a little bit about family businesses.
A lot of people have had this experience: A first-generation works hard, creates wealth, maybe a string of, let’s call it, tire stores. And that family is very successful, they open two or three more and each of the sons perhaps gets to operate their own operation at some point if they want to stay in the family business. And that’s all good.
And ultimately, you have other people who are involved, managers and things. And so, it gets a little bit complicated as far as the structure goes. And if you don’t give ownership to some of those people, some of the best people are going to leave. So people want to think about, how can I preserve my family business and enable others to be invested in it but not have me lose the value that I have built over several decades? That’s one problem.
Another problem, is that you get to the next generation, maybe the third generation, and now there’s too many. There’s too many sons and daughters of your own kids, your grandsons and they are either not interested or they are interested and they are not capable, there’s all kinds of things that can come up. And so you really have to be careful about how you handle your family business going forward.
All of these concerns can be addressed in an effective estate plan. And I do recommend, in that situation, reviewing it regularly because circumstances change. Somebody who looks like an irresponsible 22-year-old, when he’s got a child or two and is married and he’s 30, he may suddenly have a better look on life and may be more able to handle his own location or a portion of the business or whatever it is.
So that’s one reason to think about it. And they may get divorced, too, you’ve got to think about that. If there’s a divorce, that can impact what happens. So we have to look at a lot of aspects when you have a family business.
But the idea of estate planning is, you create an estate that is already its own entity. And sometimes multiple entities. And that’s okay. Because those entities can carry on even if somebody gets divorced or leaves the business or dies or whatever it is, we can set that up so that the continuity is not lost, the value of the business and the name and the reputation in the community is not lost and wealth can transfer from generation to generation.
Also, there are many tax benefits by setting up an effective estate plan. So let us help you figure that out and we are anxious to sit down and analyze that for you.
Estate Planning Dr. – Clint W. Smith, Attorney
1423 S. Higley Rd. #120
Mesa, AZ 85203