What Steps Should Florida Residents Take to Incorporate a Family Business Into an Estate Plan?

What is the Importance of Estate Planning for Small Business Owners?

Small business owners should consider incorporating their companies into their estate plans to ensure business continuity. The process is also crucial because a comprehensive estate plan is a roadmap that stipulates the transfer of ownership and control of a business when the owner passes on.

With a comprehensive succession plan for your business, you can retain everything you have worked so hard for, including your personal assets. Your beneficiaries can be protected from potential financial losses and legal disputes that may lead to bankruptcy. Consult skilled Florida personal injury and bankruptcy lawyers for insights into avoiding such aftermath.

What are the Factors to Consider When Planning an Estate with a Family Business?

Estate and succession planning call for several requirements, and going through the process without clear instructions can complicate the process. You want to make it easy for your loved ones to carry on with your business when you’re gone, so consider these crucial factors as explained by experienced estate planning attorneys in Florida:

Transfer of Assets

It’s advisable to transfer business assets to the next generation as early as possible to remove future appreciation and higher estate taxes on the estate. If the next generation is not of age to take over the business, you can use the following strategies to transfer ownership without giving up control of the company:

  • Setting up a family-limited partnership or trust for the business interests enables you to move ownership interests while retaining management control.
  • Developing an employee stock ownership plan (ESOP), a trust that allows the use of cash to buy shares from the company founders. The stakes remain in the ESOP-owned trust, benefitting those participating in the investment.
  • Establishing non-voting stock to transfer ownership to the next generation. The option is suitable and flexible if you have members of your family who don’t participate in the business but still require a share of the wealth. The approach would help you separate business ownership from management succession.

Your Florida estate planning lawyers can provide insights into the benefits of each transfer method and how each would apply to your business.

Consider and Address Liquidity Needs

Your business beneficiaries have different financial needs, so your estate planning strategy should account for this. Consider using techniques that generate cash flow without burdening future generations. One approach is to structure an installment sale of the business to the beneficiaries for more liquidity.

If you adequately address liquidity issues, you can minimize the taxes your business will owe during succession. Check that the company has enough liquidity to cover capital gains or estate taxes due after your demise. Your team of estate planning lawyers in Florida can advise on the tools to use to minimize taxes for your business.

Choose a Successor if Your Business is Sole Proprietorship

If you're a sole proprietor, your small business will become a significant part of your estate after death. The estate plan should have a clearly defined action plan for your business after your demise.

As part of business succession, you can delegate the business and prepare someone to take over if you plan to pass on the business. You could also choose to sell the company, and your estate plan should be clear about this to provide a less costly and stressful pathway for your beneficiaries.

What Tools Should I Use for Estate Planning to Incorporate My Small Business?

As you begin to plan your estate, you must evaluate all your options to capture everything necessary and avoid costly mistakes. Skilled Florida estate planning lawyers can guide you on the various tools and advise how to use each to protect your business interests:

Last Will and Testament

The legal document outlines how you desire your assets to be distributed after your demise. Having a Will to protect your personal and business investments is crucial. You can name a trusted individual in the Will to manage your business affairs and make all decisions on your behalf.

Durable Power of Attorney

A POA is a document that enables you to choose an agent and give them the authority to make business and financial decisions on your behalf if you become incapacitated. The document can help ensure the continuity of your business in your absence


You can incorporate trusts in estate planning to transfer your business assets to a trustee. The designated trustee will manage the business and related investments on behalf of your beneficiaries. Trusts are practical estate planning tools for avoiding probate, shielding assets from creditors, and providing for business continuity.

Buy-Sell Agreement

A buy-sell contract is a legally binding agreement between business partners. It stipulates what should happen to a partner's business share after death or disability. The agreement can protect your business by preventing conflicts that bring down a company.

An Experienced Estate Planning Lawyer Helping You Tailor Your Estate Plan to Your Business Needs

Estate planning is dynamic, and what works in one situation may not work in another. Therefore, it’s crucial to enlist the help of experienced estate planning lawyers in Florida to help you make the right choice. Estate planning with a business involved calls for many considerations, and it’s only prudent that you do everything right.

Our personal injury, bankruptcy, and estate planning attorneys in Florida can provide all-rounded legal counsel to help you understand all crucial issues around your estate plan. We aim to help clients fight for their future by directing them on the right legal path. Call the Dellutri Law Group at 800-391-4337 to schedule a free consultations.