If you plan to run a business in New Jersey, there are some things you should consider, particularly when it comes to your business and estate. When you age, the reality is that you may no longer be able to run your business. If that happens, you’ll need to pass it on to someone else, sell it or close your doors.
When you create a business, having it in your estate plan is a necessary step to protecting it in the future. If you do not include it in your estate plan, then anyone who is left to work there or take over won’t have directions for what to do next. The business could even enter into probate, which is a long, tedious and sometimes contentious process for your family.
Taxation can cost your family your business
Two of the problems to consider are how to include your business in your estate plan and how to find ways to minimize taxes. The so-called death tax can range between 35 and 50 percent of a business’s value and is due within nine months of your death. Your business’s assets likely aren’t liquid, which means that paying those taxes could be impossible unless your heirs sell the business. Estate planning can prevent that by using a tax deferment or by allowing you to redeem stock without high taxes.
Having a business and keeping it safe after your death can both be complicated processes. A good estate plan that considers your business and the potential for taxation can save your heirs time, money and trouble in the future.