Create A Business Succession Plan Now
Prince’s Death Illustrates A Common Error Company Owners Make. The music icon appears to have died without a will. If this is the case, probate will be a long, painful and expensive process for family and creditors. Like Prince, many business and corporation owners do not have estate and business succession plans. An incapacitating injury, illness or death to a company owner when there is no business succession plan generally results in catastrophic and expensive consequences.
Numbers based on what Prince’s estate was reported to be worth and Minnesota law suggest this oversight could cost Prince’s heirs $100,000,000!
Minnesota’s state inheritance tax has a sliding scale on estates over $1.6 million that can rapidly get to 16%. The Internal Revenue Service will take 40% on everything over $5.45 million. A rough estimate is that estate taxes on Prince’s $300-million-dollar estate will amount about to about $175 million, more than half of the estate!
Add a best case scenario of at least a year in court.
There are at least a half dozen ways the Sterling Law Group, through business succession planning, could have saved Prince’s heirs and company $100 million.
If you are the next successful business; seek legal assistance that specializes in business succession planning. Note to lawyers who work for a Prince-like client; beware a malpractice suit. In California attorneys have a duty to their clients to inform them of areas where the client may have exposure.
Five Reasons Why Business Succession Planning Is Critical
Business succession planning is fundamental to protecting companies of all sizes. What would happen to your company if something happened to you right now?!
- Implement strategies that avoid or reduce state and Federal estate and gift taxes
- Plan ownership transition if family wants to continue to operate business
- Manage specific law requirements depending on the type of Entity business is
- Provide tools to hire outside management should incapacitation or death of company owner
- Manage liquidation of company assets and debts in case of company owner death or incapacitation
Business succession planning protects all that you have worked hard for. Having a business succession plan protects your family from undo expenses or court supervised management of company. Employees, creditors and debtors are also protected by having both estate and business succession plans in place. Business succession planning now is generally a small expense when measured against the costs of not having one should an unforeseen illness, accident or act of nature or war cause the incapacitation or death of a company owner.
We are pretty comfortable saying that if The Sterling Law Group had been Prince’s Estate and Business Planning advisors, we’d have saved his heirs around $100,000,000. Prince’s family, creditors and debtors would understand that there was a plan in place to either manage or liquidate the business. Managing estates and business successions reduces the chaos and expense, so call us now and see why many Sacramento and Placer County businesses choose The Sterling Law Group to protect their wealth and families with smart estate and business succession planning.
The Sterling Law Group | Business & Estate Planning | Roseville, CA |916-790-0852