Posted by Ralph Sklar @ 12:45pm on February 9, 2017
Most of my business owner clients tell me that their number one estate planning objective is to preserve family harmony, but in an effort to manage estate taxes, many of them have estate plans that are likely to cause war. If you want your children to get along after you're gone, it may not be a great idea to leave your business to those who work in it and those who don't. There are bound to be arguments about the many decisions that have to be made, such as what the salary should be for the active sibling, how much of the profits should be reinvested to make the company grow, and how much should be distributed as dividends. The same type of problems are likely to exist if you leave the business to a spouse who doesn’t work in it instead of the adult children who do. All of that being said, proper planning and documentation can help everyone avoid the drama. Sometimes life insurance can help, but the devil is in the details. Each person's plan must be carefully crafted for their specific situation and goals in order to maximize harmony.