Legacy Planning for Your Family Business

Family businesses play an important role in our economy. According to data from the Family Business Alliance, there are 5.5 million family businesses in the United States. For perspective, approximately 60% of the entire U.S. workforce is employed at a family enterprise.

Building, growing, and maintaining a successful business is not easy. There are many unique issues facing family business owners. Here, our San Diego business & estate planning lawyer highlights some of the key challenges facing family businesses and explains how legacy planning can help.

The Challenge for Family Businesses: Preserving Wealth and Values

The current economic environment presents some significant challenges for business owners. For families, there are additional issues that must be considered. In a recent study, family business owners reported the following areas of concern:

1. Business Success: How do we ensure the long-term success and viability of our company?
2. Wealth Protection: What steps do we need to take to most effectively protect our assets for future generations?
3. Value Preservation: How do we preserve the values that made our business successful?

A Legacy Plan is a Comprehensive Strategy for Family Businesses

Broadly defined, a legacy plan is an estate planning strategy that formalizes a family business owner’s financial interests, values, and wishes to help ensure the long-term success of a company and to promote and preserve its guiding principles. Among other things, legacy planning for a family business may include:

1. A Business Succession Plan: Every family business needs a business succession plan. Without one, a company may struggle to transition. A business succession plan should identify future owners/decision makers (inside or outside the family) and ensure that they have the tools and information they need to take control.
2. A Trust: A family business owner may want to consider setting up a trust for the company. By transferring assets into a trust, a family business owner can often set up children, other family members, and future generations as a whole for success. When properly crafted, trusts offer many advantages, including efficiency, tax savings, and protection against creditor claims.
3. A Mission and Values Statement: Many family businesses have a mission and core values that define their company. Through legacy planning, family business owners can clarify the values and mission—so that future generations can effectively carry out the tradition.

No two family businesses are exactly alike. Family business legacy plans should be customized. A California estate planning lawyer who has experience advising family business owners can help you and your loved ones craft a plan that best protects your financial interests and achieves your goals.

Call Our San Diego, CA Estate Planning Attorney Today

At The Law Office of Kris Mukherji, our California estate planning lawyer provides top quality, fully personalized legal services to business owners and their families. If you have any questions about legacy planning with a family business, we are more than happy to help. Contact us now for a confidential initial consultation. From our San Diego office, we represent clients throughout the wider region, including in San Diego County, Riverside County, and Orange County.