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The different ways to step away from a company

Succession planning is important for business owners in Florida and throughout the country. This can be true whether an owner plans to sell a company or transfer it after death. There are multiple ways in which a business can be sold. The first method is to sell it outright for cash or assets. If the company is sold for fair market value, there is no need to pay gift or estate tax.

Another option is to use a buy-sell agreement. This type of arrangement sees a person or group of people buy a company after a predetermined event such as the current owner's death. One potential downside is that the company can't be sold or otherwise downsized without the permission of the future buyer. Self-cancelling installment notes may provide a novel way to sell a business and engage in estate planning at the same time.

Foreign assets and estate planning

In a world getting more globalized, people from Florida are increasingly investing in foreign assets, such as large olive groves in Turkey, mansions in Europe and yachts on the Seine. Those investors have to know how they should structure the ownership of their assets in order to optimize estate and tax planning.

When purchasing foreign assets, individuals should take several factors into consideration. For starters, Americans ought to know that they are not exempt from paying taxes on their foreign assets when it comes to estate taxes. In that same vein, asset owners would do well to disclose everything they own, regardless of where it is located, to their estate attorney when coming up with their estate plan. These people might be spared a little if there are treaties with the country in which the asset exists, but the general rule is to prepare for taxes.

Family business owners can plan for the future

When a business owner in Florida thinks about the future of their company, their mind may turn to succession planning. Making these plans can be critical to keeping a firm profitable and successful for many years. However, many family business owners neglect to put a plan in place to prepare for a generational transition. Some may find it difficult to consider handing over an enterprise to their children or dealing with disinterested or squabbling family members.

According to the 2016 Family Business Survey, 43 percent of family business do not have a succession plan. However, almost 75 percent of respondents said that they planned to pass their businesses to their children. Family businesses may require a great deal of work on the part of the owner while future planning decisions are pushed off down the line. However, while people may avoid succession planning in order to prevent family disputes over the future of the company, failing to do so may lead to more complicated problems.

Debunking common estate planning myths

Taking charge of your life and your future involves taking in new knowledge and understanding of how to accomplish this. Small changes in the right direction will lead you towards the security you seek in preserving your assets and ensuring your wishes are respected after death. Many Florida residents know they need to start the estate planning process, but don’t know where to begin or what is relevant for their needs.

Seeking quality legal counsel is the best way to start the process to secure your assets. In addition, there are many beliefs that are simply not true when it comes to getting your affairs in order. When you fall for one of the following myths, your personal progress towards long-term security may suffer as a result.

Blended families underscore the need for estate planning

The many variables and options in establishing an estate plan can be confusing, and careful planning is needed to ensure that the ultimate result is the one desired. The primary basis for most Florida residents' estate plans is to achieve a balance between ensuring that their spouse is taken care of and leaving some provisions for their children as well. When there is only one marriage, finding that balance can be straightforward, but when a second marriage and a new family are part of the mix, it is particularly important to review and update the plan.

Personal financial experts report that the largest age group who remarries falls in the above 55 category. This is significant because this is also the age group that typically has more assets coming into a marriage than any other age group, such as real estate, retirement accounts and investment accounts. Also, many people at this age have children from their first marriage. A plan that leaves all assets to the new spouse probably means that the kids from the first marriage will receive nothing, and this result may not be the intention.

Quality tips for estate planning in 2019

The start of a new year is a great time to consider creating an estate plan. This instrument can benefit anyone over the age of 18 who lives in Florida or any other state. The most important part of an estate plan is the last will and testament. It will help a person gain greater control over who receives assets after he or she passes on.

Without a will, assets could be passed on according to state law. It is a good idea to inventory assets to ensure that they have all been accounted for in an estate plan. Be sure to have a health care proxy as well as a financial power of attorney. The health care proxy handles medical decisions while the financial power of attorney is able to sell assets or access bank accounts while an individual is incapacitated. Furthermore, take some time to check beneficiary designations and update them, if necessary, to ensure that assets go to the right people.

Estate planning involves planning ahead

Many Florida residents who contemplate estate planning fall into one of two broad categories. While some have a variety of different assets and don't know where to start, others feel that they have very few and don't think an estate plan is worth the trouble. The reality is that everyone can benefit from having a plan in place. And while distributing one's accumulated assets to beneficiaries according to one's wishes is a primary goal, there are other benefits a well-crafted estate plan can provide.

When organizing paperwork and thoughts for an estate plan, financial experts often recommend beginning with powers of attorney designations. Typically, one is created for financial and business purposes and another for health care decisions. In each case, the designated person will act and make decisions in the event of a temporary incapacitation. In this sense, an estate plan protects the individual during his or her lifetime as well as provides post-death direction benefiting the heirs.

Including life insurance in an estate plan

People in Florida thinking about the future may create a will in order to pass their belongings forward to the next generation. However, creating a will is only a part of making a complete estate plan. As baby boomers begin to age, they may put more attention to the question of how they can plan for the years to come, including their own retirement as well as providing for their loved ones after they are gone. While 42 percent of baby boomers still lack any type of estate plan or even a basic will, many of those who have done some planning have not reviewed their wills in years. As a result, they may have out-of-date documents that do not reflect current laws or their close relationships.

While wills, trusts, powers of attorney and other documents all have a key role to play in transferring wealth, people looking for flexible options may also consider how life insurance can work as part of their estate plan. Baby boomers have accumulated significant wealth: They are the wealthiest generation on record with $30 trillion in assets to manage. Life insurance helps people manage their estates, especially as an insurance payment can provide much-needed access to ready cash.

Keeping an estate plan up to date

When Florida residents think about the future, they may assume that everything will be taken care of if they have a will or estate plan. However, it can be important to regularly review estate documents in order to ensure that they reflect legal and personal developments that could affect distribution. In general, estate plans that are three or more years old should be reviewed to determine if changes are necessary. However, personal events like marriage, divorce or the birth of a child can also spark a review.

Changes in tax law can be an important impetus to go over an estate plan and potentially revise a will. If the exemption limit for inheritance taxes changes, it could inspire estate owners to make changes. Even if the laws remain the same, however, there are a number of personal choices that can affect the way that people choose to distribute their property. Because estate law is handled at a state level in most cases, moving from one state to another can prompt a review of wills, powers of attorney and related documents.

How can you create a business succession plan?

Estate planning should be an important part of anyone’s life, but it is particularly important for business owners. You may not realize it, but business owners need to create a sort of “estate plan” for their business, as well as themselves.

Business succession planning is crucial for any business owner and should not be overlooked. It is smart to create a plan for your retirement, or if the unexpected should happen, as soon as possible. But how do you get started? How do you create a business succession plan?

Kramer A. Litvak, P.A.
226 East Government Street
Pensacola, FL 32502

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Phone: 850-308-1677
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