Planning who will receive your assets after you pass away can be a challenging task. But if a growing business is part of your asset mix, estate planning can be even more complicated, financial experts tell Business Report in a feature from the current issue.
Ensuring that heirs share appropriately in the benefits of an ongoing business is far different from determining how cash, real estate and other hard assets will accrue to a surviving spouse and offspring.
Alton “Biff” Bayard III, an estate planning and tax specialist with the Baker Donelson law firm in Baton Rouge, advises business owners to start planning at an early stage in a company’s growth and keep in mind a key point:
“‘Fair’ does not always mean ‘equal,’ and equal is not always fair,” he says.
Bayard says a business owner’s estate planning often requires asking sensitive questions, such as: Will my child or children have any interest in taking over this business? Do they have any aptitude for managing it? If one child becomes involved and others don’t, what is the fairest way to ensure that they all benefit from the operation? What about the child who is notoriously irresponsible—should he or she receive the same consideration as the others?
In cases where a business owner has a “blended” family, the questions get even trickier: Will my former spouse share equally in the business profits with my current spouse? Should children from my first marriage and my later marriage share equally? What about the grandkids?
Bayard says most parents try to be generous.
“They virtually always want to be fair, and many times they’ll start out thinking that in order to be fair, everybody should receive an equal share of the assets,” he says.
But being fair is hardly ever a matter of simply carving a business into equal parts. Read the full feature. Send your comments to editors@businessreport.com.
