By: Neel Shah, Esq.
According to data from the U.S. Census Bureau, in 2012, there are 27.6 million businesses closely held in the United States. Business ownership and entrepreneurship are critical drivers of legacy creation as well as significant wealth, but it becomes even more important for the individual to approach estate planning from their personal perspective as well their business.
Owners of closely held businesses should commit to succession planning and looking ahead for exit strategies as well as estate planning as well. Up to 80% of business owners, according to research conducted by the Family Business Institute, indicated that they will be able to pass their company on to the next generation. However, business succession statistics actually show that there is a decrease in business survival. Up to 64% of business owners in 2015, did not have any business succession plan at all, putting their family’s greatest source of security and wealth at risk. You need to consult with an experienced business succession planning attorney as soon as possible to identify all of the opportunities to minimize your risk and this includes looking at succession planning and exit strategies as well.
As you are discussing things with your estate planning attorney, you may have already started or are considering starting a new business venture. You will have individual estate planning as well as business planning concerns that may have separate sections for estate planning and may be interconnected in some ways. There is no better time to protect your business than at the start of launching a company, but you can still benefit from business succession planning and estate planning if you have already been in business for some time. One of the most important things to protect is your trade name when you launch a company.
The name of a business is one of the issues that is resolved first in launching a new venture, but often, clients don’t give much thought on how to protect that name because they don’t realize that there is much to protect or are too busy with other issues. There is no better time, however, to protect your business’s name at the start of its use, simply because starting a new business doesn’t mean that your firm is automatically protected.
Additional effort is required and may involve other professionals such as an intellectual property attorney in addition to the estate planning professional you are currently working with. Scheduling a consultation directly with an attorney who can advise you about how your individual estate planning and your business succession planning may intersect, is important.