Houston Estate Planning and Elder Law Attorney Blog
If you are a business owner and want to transfer your ownership to a family member or external party, there are several options available to you. The best option, as always, will depend on your own circumstances and goals. On today’s blog, however, we review the basics of the most common options that business owners use when transferring ownership of their business. The most fundamental tip we offer to those considering transferring ownership of a business is to start looking into options early. Because the process requires so much care and attention, it’s never too soon to start thinking through the various possibilities.
Option 1: Gift the Business to a Family Member
If you have a daughter, son, or grandchild that you want to take over your family business, the first option is to transfer the business as a gift. In the United States, the gift tax exemption gives business owners the opportunity to transfer their company, in part or in whole, without charging any money. This federal exemption changes every year, so be sure to ask a wealth planning professional or estate planning attorney about this year’s annual limit.
Option 2: Sell the Business
You can, of course, sell your business in part or in full. By selling only part of the business, you can retain some ownership (and therefore some control) over the business while you take the time to pass down your institutional knowledge to the next generation. You could choose to do an internal sale, selling to a family member, or an external sale. Either way, it is important to think through your options early and do your due diligence so your business can carry on successfully.
Option 3: Lend a Buyer the Funds to Purchase
You could also loan money to a family member or to an external party that is interested in buying your business. This makes the purchase more accessible to those who are interested in buying, while at the same time allowing you to benefit from a consistent flow of cash as the buyer pays back the loan.
No matter which option you choose, transferring title of your business requires significant forethought. By retaining a team of experts to help you navigate the process, such as a wealth planner and an estate planning attorney, you can be sure you do all in your power to allow your legacy to live on.
Do You Need a Houston Estate Planning Firm in Your Corner?
At McCulloch & Miller, we are experts in helping clients navigate all aspects of estate planning. We are there for our clients every step of the way, whether they are thinking through major business decisions, financial decisions, or relational decisions. Our team is experienced, thorough, and holistic, and you can trust that we have your best interests in mind. For a consultation with a Houston estate planning attorney from our firm, give us a call today at 713-903-7879. You can also fill out our online form with your contact information to have an attorney get back in touch with you as soon as possible to discuss next steps.