Owning your own business can be both rewarding and challenging. If you have been running your company for a number of years, you probably realize that protecting yourself as well as your accumulating assets becomes increasingly important if you expect to leave everything to your heirs when you pass away.

Developing an estate plan using advanced strategies can not only protect you from potential lawsuits and creditors but can also allow you to avoid unnecessary taxes and keep assets out of probate. You can also ensure that your business passes to the right people, so your customers continue to receive products or services that meet your standards.

Trusts

There are various kinds of trusts you and your lawyer can set up to transfer ownership of large assets to your children either before or after you pass. If you want to pass on ownership while you are alive, you can still retain a source of income for yourself using entities like a grantor retained unitrust or annuity trust. One benefit to these is that the appreciation of the business from the time you establish the trust is usually not subject to estate taxes.

Succession plan

Whether your business is family-owned or has multiple owners, be sure to have a plan for succession in the case of an unexpected death. Include the delegation of responsibility and authority, and establish necessary documentation to legally pass on ownership.

Other entities that could benefit your business include family limited partnerships and family LLCs. These entities, when set up correctly, may allow your heirs to avoid some gift taxes and probate proceedings.

Protecting your business and family

These strategies can provide many benefits for ensuring the safe transfer of your business after or before you pass, while eliminating certain taxes, avoiding probate and ensuring the following of your wishes. Keep in mind that advanced estate planning strategies come with complex laws and the documents must be carefully drafted for the California legal system to deem them legitimate.