For the safety of our clients and staff, and as required by law, all Ettinger Law Firm offices are closed until we are permitted to reopen.

Please be assured that all staff is currently working remotely and are available to you by email or phone.

All staff will be checking their phone and email messages daily*.

Please call our Director of Client Relations, Pattie Brown, at 1-800-500-2525 ext. 117 or email Pattie at pbrown@trustlaw.com if you need any further assistance.

* You can also use this link to schedule a phone consultation with one of our attorneys.

New York Estate Plan Lawyer Shares Value of Business Succession Plans

Many local residents believe that crafting a New York estate plan only involves making of list of who will receive what at death and taking steps to ensure that taxes are saved in the process. While these issues are all important aspects of long-term planning, many others factors are also considered. Our New York estate planning lawyers tailor each plan uniquely to every new client, and no two community members are exactly the same. For example, many local families own and run businesses. It is incredibly important for these families to work on proper business succession planning when they consider their long-term preparations.

This weekend the Times Herald-Record published an article written by our New York estate planning attorney Bonnie Kraham, Esq, that explores the importance of business succession planning. Attorney Kraham explains how only a minority of family-owned business survive beyond the first generation. While 90% of all American businesses are family owned, 70% of them will end when the founding family member passes on. Only 15% of those current businesses will make it to a third generation. A large part of the declining rates and lack of longevity is the failure of many of these companies to have a business succession plan.

These plans take time, as the original entrepreneur should be around to help monitor the next generation for five to ten years while the process unfolds. A good rule of thumb is for the elder member to begin implementing the changes around the age of sixty. Of course the actual plan itself should be a collaborative process with input from the entrepreneur as well as the successors. There are many different variables to take into account, including the feelings, ambitions, and goals of all those involved. When done well the plan should also include input from a variety of professionals. Lawyers are necessary for the estate planning and agreement preparation, accountants should consider taxes, and financial advisors can determine the best investment strategies.

When it comes to actually transferring ownership, there are various methods that can be used. On one hand, gift tax rules allow couples to give a certain amount of stock in the company to children each year without paying a gift tax. In addition, there is a lifetime gift tax exclusion that each spouse can give up to $1 million. However, the most common method used to transfer ownership involves a “buy-sell agreement.” These agreements require one party to buy and another to sell at a certain price and at a certain time–such as upon retirement, disability, or death.

See Our Related Blog Posts:

Estate Planning May Be a Family Decision

Succession Plans Are Essential For Family Businesses

Contact Information