Managing personal and business assets is a large responsibility, and one that most don’t take lightly. Changes to gift and estate tax law
that are set to go into motion at the end of the year have many business owners and high net-worth Americans scrambling to develop succession and inheritance plans that will help keep estate taxes to a minimum.
Due to the financial and tax ramifications of these estate planning tasks, business entities should consider contacting a professional to assist them, rather than performing these responsibilities alone.
In many cases, business owners may not realize how complex their estates may truly be, especially if they have not yet developed a succession plan or assessed their company’s value in a long period of time. For these reasons, making estate planning decisions without the guidance of a tax professional and attorney can result in individuals making less-informed decisions that can have heavy consequences, said former president of the Virginia Mortgage Bankers Association, Steven Rockefeller.
In addition to making potentially costly estate planning mistakes, individuals who are uninformed about tax law may inadvertently transfer high expenses to their successors. Confusing or ill-prepared estate documents may require survivors to seek legal representation to sort out mistakes.
Consulting a professional can also help business owners ensure that certain stipulations regarding a company’s operations are clearly outlined. For example, business owners may make certain rules regarding the allocation of financial resources or the roles and responsibilities of successors who take over a company. In some cases, owners may also choose to utilize the tax protection that trusts afford them to ensure that their business legacy remains intact.