Question: I am the proprietor of a family owned and operated business. Should I leave control of my business to my spouse?
Answer: There are a whole host of issues here, but to be brief, as you can guess, each family business is different. Some spouses are heavily involved in the family business and others are not involved in the business to any large extent.
Since typically most of the family’s wealth is tied to the business, a common plan is to bequeath all the stock of the company to the spouse. This plan may be fine, but it often puts a good deal of stress on the spouse as there may be multiple branches of the family who are dependent on the business for their livelihoods (sons, daughters, siblings, etc).
One option to consider if the choice is to leave the stock (and control) of the business to the surviving spouse may be to establish a board of advisors of business associates, family advisors, children, and outside professionals. The team of advisors would assist the spouse in making good business decisions. It may not be a bad idea to implement the advisory board concept early on with a written plan. Such a plan could be worked in with the overall estate plan.
As always, if you have any questions or would like to learn more, please contact me at email@example.com or 301-575-0313.
ABOUT STEVE SHANE
Steve Shane provides strategic counseling to clients in need of estate administration, charitable giving and business continuity planning while minimizing estate, gift, and generation-skipping transfer tax exposure. He offers legal guidance to clients on asset protection and the proper disposition of assets in accordance with the client’s objectives, while employing tax planning techniques such as the use of irrevocable trusts, life insurance planning, lifetime gifts and charitable trust. He is also experienced with drafting documents for business planning, the incorporation and application for exemption for Private Foundations and the administration of decedents’ estates.
You can connect with Offit Kurman via our Blog, Facebook, Twitter, Google+, YouTube, and LinkedIn pages. You can also sign up to receive Law Matters, Offit Kurman’s monthly newsletter covering a diverse selection of legal and corporate thought leadership content.
MARYLAND | PENNSYLVANIA | VIRGINIA| NEW JERSEY | NEW YORK | DELAWARE | WASHINGTON, DC