• Cole Gorman

The benefits of creating a business transition plan

Your business is your life. We get it.

You’ve put time, money and energy towards making it as successful as possible.

Being a good business owner means hoping for the best and preparing for the worst.

Yet according to a study by Wilmington Trust, 58 percent of business owners haven’t created a transition plan.

Their excuses range from “there’s not enough time in the day” to “it’s too far away to think about.”

However, the sooner a business owner develops a plan, the better it can be for them and their business.

Transition plans can provide clear instructions during a time of upheaval. They can also help lower the tax impact that comes with inheriting a business.

If you decide to sell your business, you will need to understand the tax implications it has on your estate and retirement.

Planning to leave a business to your family can be a complex affair. There are high tax burdens associated with ownership transfer and it can be a delicate balance to keep everyone happy.

Both decisions have different challenges and benefits. Whichever you choose will have an impact on how you coordinate a transition.

The further out you can schedule a transition, the more time you have to find ways to reduce taxes or develop a strategy that’s right for your family.

Creating a transition plan may feel like giving up control of your business before you are ready. That isn’t the case.

You can customize your individual transition so that you keep some control for as long as you want.

The advantages of creating a strong business transition plan cannot be overstated. It can protect what you’ve worked so hard to create and give clear guidelines regarding your business.

If you haven’t explored your options, speak with an experienced business and estate planning attorney.

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