Last updated on March 4th, 2024

Jack and Jill decided it was time to get an estate plan in place. They met with their advisor and started a gifting plan to their children, grandchildren, and great-grandchildren. Unfortunately, both Jack and Jill passed away before the plan was complete. Had they started the gifting plan just a few years earlier they could have saved estate taxes and an additional $1 million could have gone to their beneficiaries rather than to taxes. Now it’s too late.

Alexis and Skylar had been together for 30 years, built a successful manufacturing business, and had plans to travel the world when they retired. That changed when Alexis suddenly passed away at age 54. Without an estate plan and a marriage license, Alexis’ parents were named executors of her estate – not Skylar.

Trevor spent his life building a successful business with 60 employees and total annual revenue of $40 million. He never married or had children. While a niece joined his business after college, she didn’t seem to have the skillset to keep it going long-term. So, he just kept working thinking he had time to figure it all out. At 68, he passed away. A short time later, his business shut down. Now, years later, his estate is still tied up in court, lawyers’ fees are immense, and his siblings, nieces, and nephews are fighting about who gets what.

It’s never too early to put an estate plan in place, but there is a time when it’s too late. Failing to create, review, and update a plan at least once a year can have a significant impact on the people you want to take care of, the value of your estate, your tax obligations, and the legacy you leave behind. With major changes to Federal laws scheduled to take effect in just over 22 months plus the impact of New York laws, it’s even more important that you make time to create and update your estate plan now.

Estate planning is a comprehensive process to manage and protect assets during your lifetime, define how your personal affairs should be managed while you are alive, and confirm what will happen upon your death. It can include setting up trusts, arranging for powers of attorney, establishing healthcare directives, planning for potential long-term care needs, tax planning, and more.

When it comes to your business, an estate plan can foster a smooth transition of leadership and operations by including a succession plan. Estate planning allows business owners to decide who inherits their business, whether it’s family, partners, employees, or a trust. This can help prevent disputes among heirs and ensure that the business endures.

Plus, estate planning helps maximize the value of your assets that go to your beneficiaries, while minimizing tax obligations. By setting up trusts, gifting shares, or establishing buy-sell agreements, you can significantly reduce the tax burden on your heirs. This can be crucial in ensuring that your business remains viable and doesn’t need to be sold to cover taxes. What’s more, estate planning can protect a business from creditors. By strategically structuring business assets and personal assets, an estate plan can shield the business from being used to settle personal debts.

In essence, estate planning is not an option, but a necessity for every business owner. Business owners should consider estate planning as an integral part of their business strategy and seek expert advice to ensure their plans are comprehensive and legally sound.

RBT CPAs professionals in our Estate, Trust and Gift Practice can help you create and update an estate plan that gives you peace of mind in knowing you, your loved ones, and your business will be taken care of according to your wishes during your lifetime and after.

While RBT is not a law firm, we can help you create a succession plan, refer you to an attorney who can create related legal documents (or work with your attorney if you already have one), review legal documents to ensure they accurately reflect your wishes, and review and update your plan annually so they continue to reflect your wishes and are adapted due to any tax law changes.

If you’re interested in learning more, getting started, or reviewing plans you may already have in place, please don’t hesitate to give us a call and find out how we can be Remarkably Better Together.

RBT CPAs is proud to say 100% of its work is prepared in America. Our company does not offshore work, so you always know who is handling your confidential financial data.