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Kentucky estate planning: Ensuring a smooth business succession

Most business owners probably have at least a vague idea of what should happen to their business after they let it go or after they're gone. But an idea that you don't detail in writing isn't likely to help you or your heirs in matters of business succession.

In coming up with a good succession plan, the first thing to do is to clarify what your goals are. Maybe you'd like for your second-eldest child and not the eldest to inherit the business, or maybe you want to sell company shares to a select few employees or to partners. Or maybe a sale on the open market is the best option. In any case, it is a good idea to have on your side a business succession attorney with experience in comprehensive estate planning.

If you intend to pass the business on to your family's next generation, then you may want to sell or give away parts of the business over time. Or maybe your preference is to have your heirs inherit the assets after you die. With each of these options, it is important to account for the tax implications. In 2015, the federal estate tax kicks in for estates valued at more than $5.4 million, though there are ways of limiting your family's tax burden through careful planning.

As with any major estate planning decision, your family's specific dynamics will have to be considered. If there are special circumstances -- for example, one child's education makes him or her particularly suited to carry the business into the future -- then you'll want to be aware of your options for achieving an equitable, and not necessarily equal, transfer of estate assets.

The estate planning and probate lawyers of Landrum & Shouse work with clients in Lexington and throughout Kentucky to create comprehensive estate plans, including business succession strategies.

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