• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer
  • Home
  • Our Firm
    • About Our Firm
    • Attorney and Staff Profiles
  • Services
    • Asset & Business Planning
    • Dental Practice Law
    • Estate and Gift Tax Figures
    • Estate Planning Services
    • Family-Owned Businesses & Farms
    • Financial Planning Assistance
    • Incapacity Planning
    • IRA & Retirement Planning
    • Legacy Planning
    • LGBTQ Estate Planning
    • Medicaid and Elder Law
    • SECURE Act
    • Special Needs Planning
    • Trust Administration
  • Elder Law
    • Coping With Alzheimer’s
    • Emergency Medicaid & Nursing Home Planning
    • Guardianship & Conservatorship
    • Hospice Care
    • Medicaid Planning
    • Veteran’s Benefits
  • Resources
    • DocuBank
    • Elder Law
      • Elder Law & Medicaid Definitions
      • Elder Law Reports
      • Elder Law Resources
        • Carmel, Indiana Elder Resources
        • Fishers Indiana Elder Law Resources
        • Greenfield, Indiana Elder Law Resources
        • Greenwood Elder Resources
        • Indianapolis Elder Law Resources
        • Lawrence Elder Law Resources
        • Plainfield Elder Resources
        • Zionsville Elder Law Resources
    • Estate Planning
      • Estate Planning Checkup
      • Estate and Gift Tax Figures
      • Estate Planning Definitions
      • Estate Planning Reports
        • Advanced Estate Planning
        • Basic Estate Planning
        • Estate Planning for Niches
        • Trust Administration
      • Incapacity Planning Definitions
      • Is Your Estate Plan Outdated?
      • Top 10 Estate and Legacy Planning Techniques
    • Free Estate Planning Worksheet
    • Frequently Asked Questions
      • Alzheimer’s and Dementia
      • Asset Protection Planning
        • Business Succession Planning
      • Challenging an Indiana Will
      • Elder Abuse
      • Elder Law
        • Medicaid
        • Medicaid Planning
        • Planning for Long-Term Care
      • Estate Planning
        • Avoiding Estate Taxes
        • Estate Planning for Parents
        • Frequently Asked Questions for Families Without an Estate Plan
        • LGBTQ Estate Planning
        • Women and the Need for Estate Planning
      • Financial Planning
      • How Divorce Impacts Your Estate Plan
      • Incapacity Planning
      • Legacy Wealth Planning
      • Pet Planning
      • Philanthropy in Your Estate Plan
      • Probate
      • Power of Attorney
      • Serving as Trustee
      • Small Estate Administration
      • Trusts
        • Trust Administration
        • Trust Administration
        • Serving as Executor
      • Testamentary Trusts
      • Understanding Your Social Security Retirement Benefits
      • Updating Your Estate Plan
      • Veteran Benefits
      • Wills
        • Contesting a Will
    • Newsletter
    • Pre Consultation Form
    • Probate and Trust Administration
      • Bereavement Resources
      • How to Know if You Need Extra Help With Your Grieving
      • Loss Of A Loved One
      • Probate Resources
        • Carmel, Indiana Probate Resources
        • Greenfield Probate
        • Greenwood Probate
        • Indianapolis Probate
        • Plainfield Probate
        • Indiana Probate
        • Zionsville Probate
      • Things You Need To Do When a Loved One Passes Away With a Trust
      • The Mourner’s Bill of Rights
      • Things You Need To Do When a Loved One Passes Away With a Will
      • Trust Administration & Probate Definitions
  • Reviews
    • Our Reviews
    • Review Us
  • Areas We Serve
    • Boone County
      • Lebanon
      • Zionsville
    • Hamilton County
      • Carmel
      • Fishers
    • Hancock County
      • Greenfield
    • Hendricks County
      • Brownsburg
      • Plainfield
    • Johnson County
      • Franklin, Indiana
      • Greenwood
    • Marion County
      • Central Indiana
      • Indianapolis
  • Blog
  • Contact Us

Frank & Kraft, Attorneys at Law

Indianapolis Estate Planning Attorneys

CONNECT WITH US TODAY(317) 684-1100

Attend a Free Workshop
Home » Is Your Business Protected in Your Estate Plan?

Is Your Business Protected in Your Estate Plan?

October 27, 2021Estate Planning

business succession planning

As a business owner, the need for comprehensive and inclusive estate planning is amplified. Without a business succession planning component in your estate plan, all the hard work and sacrifice on your part to get your business off the ground may be at risk if something happens to you. The Indianapolis business succession planning attorneys at Frank & Kraft are committed to helping you protect your investment by explaining the importance of business succession planning.

The Importance of Business Succession Planning

While operating a business can be both financially and emotionally rewarding, it can also be stressful and exhausting at times. As a small business owner, you have undoubtedly faced your fair share of struggles and challenges. One of the most important of those challenges is to prepare your business for the possibility of your own incapacity or death. Failing to do so could have disastrous consequences for both your business and your loved ones.

One of the most common dilemmas small businesses face is the tendency for a small business to lack sufficient liquidity. Operating a cash-poor business may not be problematic while you are alive; however, it can be a problem during the probate of your estate because your estate is subject to federal gift and estate taxes. Any taxes levied on the estate are calculated based on the total value of the decedent’s estate assets at the time of death. If your estate does owe gift and estate taxes but lacks sufficient liquid assets to satisfy the debt, your Executor could be forced to sell vital business assets to raise the necessary cash. That, in turn, could threaten the future of your business and leave loved ones without the financial security that you thought you were leaving for them.

Your own incapacity could also create a huge problem for your business if you failed to plan for the possibility. Who would take over control of the business? Does your designated successor have the necessary legal authority to run the business in your absence? These are the types of questions that should be answered in a business succession plan to ensure that your business will continue to function successfully in your absence should the need arise.

Protecting Your Small Business

The key to protecting your business is careful estate planning that incorporates business succession planning tools and strategies into the plan.  You have undoubtedly invested a considerable amount of time and resources into building up your business to the point where it is successful. Whether you hope to pass on the business to the next generation or plan to leave the value of your interest in the business to your loved ones when you are gone, care must be taken to ensure that your hopes for the business become reality.

If you were to become incapacitated tomorrow, would your business survive? Part of a well-thought-out business succession component includes designating someone of your choosing to step in and keep the enterprise running smoothly in the event of your incapacity and ensuring that they have the legal authority and practical tools necessary to do so.

Planning for your permanent departure is equally important. Will the business be passed down to the next generation or will your interest in the business be sold when you are gone? To ensure that your business does not become a statistic, you may decide to create a Family Limited Partnership (FLP). An FLP allows you to pass down your interest in the business slowly over time while maintaining the ability to run the day-to-day operations until you are ready to turn over the helm. There are also typically tax advantages to transferring ownership using an FLP.

If passing down the business is not an option, preparing for the sale of your interest should be part of your business succession plan. In that case, a Buy-Sell agreement might be a beneficial addition to your overall plan to ensure that your loved ones receive the maximum value of your interest. Unfortunately, surviving family members are often forced to sell a business for pennies on the dollar when plans were not made ahead of time. A Buy-Sell agreement guarantees that you (or your loved ones) will receive the fair market value of your interest in the business if the business must be sold later.

Contact Indianapolis Business Succession Attorneys

For more information, please join us for an upcoming FREE seminar. If you have additional questions or concerns regarding how to protect your business within your estate plan, contact the experienced Indianapolis trust attorneys at Frank & Kraft by calling (317) 684-1100 to schedule an appointment.

  • Author
  • Recent Posts
Paul A. Kraft, Estate Planning Attorney
Paul A. Kraft, Estate Planning Attorney
Paul Kraft is Co-Founder and the senior Principal of Frank & Kraft, one of the leading law firms in Indiana in the area of estate planning as well as business and tax planning.

Mr. Kraft assists clients primarily in the areas of estate planning and administration, Medicaid planning, federal and state taxation, real estate and corporate law, bringing the added perspective of an accounting background to his work.
Paul A. Kraft, Estate Planning Attorney
Latest posts by Paul A. Kraft, Estate Planning Attorney (see all)
  • Will I Still Have Control Over Assets If I Transfer Them into a Trust? - October 3, 2023
  • How Does Life Insurance Fit into My Estate Plan? - September 28, 2023
  • Will Medicaid Pay a Family Member to Care for Me in Indiana? - September 26, 2023

Other Articles You May Find Useful

Life insurance estate plan
How Does Life Insurance Fit into My Estate Plan?
Estate planning wishes honored
The Art of Estate Planning: Ensuring Your Wishes Are Honored
For many people, the primary motivation for creating an estate plan is the desire to provide for loved ones in the event of death. Along with ensuring that your estate assets are passed down to your designated beneficiaries, a well thought out estate plan can also help make sure your beneficiaries receive those assets as soon after your death as possible. As the Indianapolis estate planning attorneys at Frank & Kraft explain, making use of the Indiana Transfer on Death Property Act is one way to transfer assets quickly after your death. The Problem with Probate If you have a spouse, children, parents, or other loved ones who financially depend on you, an important estate planning goal is to ensure that your loved ones have access to much-needed assets as soon as possible after you are gone. Unfortunately, probate can drag out the time it takes for beneficiaries to receive assets. Probate is the legal process that is often required following a death. While the ultimate goal of probate is to transfer assets to beneficiaries and/or heirs of the estate, several steps must be completed first. For example, creditors of the estate must be notified and provided with the opportunity to file claims against the estate. Any challenges to the validity of the Will must also be litigated before assets can be released. It can take months, even years, for assets to finally be released to the new owners if those assets have to go through probate. One of the many estate planning strategies available to help your estate avoid probate in the State of Indiana is the use of Transfer on Death Property Act. What Is the Indiana Transfer on Death Property Act? The Transfer on Death Property Act (TDPA) can be found at Indiana Code 32-17-14 et. seq. The overall purpose of the TDPA is to allow the owner of real property to transfer his/her legal interest in that property to a designated beneficiary or beneficiaries at the time of death. When interest in property is transferred using the TDPA the property does not have to go through probate, meaning the beneficiary takes ownership of the property immediately following the death of the previous owner. Because people are often familiar with the “Payable on Death (POD)” option offered on financial accounts, it may be beneficial to think of a transfer on death property deed as similar to a POD designation on a bank account. When you designate a bank account, for example as a POD account you name a beneficiary. Immediately after your death, ownership of the bank accounts legally transfers to the beneficiary without the need for legal action. It is important to note that with a TOD deed or a POD account, the designated beneficiary has no legal ownership interest in the asset prior to the death of the owner. This is the primary difference between owning assets jointly and a TOD/POD designation. When you jointly own property or other assets, the co-owner has a present legal ownership interest in the asset. For example, if you and your spouse own real property jointly with rights of survivorship, your ownership interest in the property will automatically transfer to your spouse upon your death, just as with a TOD deed; however, your spouse also has an equal ownership interest in the property while you are alive. If you used a Transfer on Death deed instead of joint ownership, your ownership interest in the property would pass to your spouse upon your death; however, he/she would have no legal ownership interest in the property while you are alive. For a Transfer on Death deed to be valid, it must be executed by the owner of the real property, or their legal representative, and be recorded in the county where the real property is located. Upon the death of the property owner, the designated beneficiary takes legal ownership of the property without the need for the property to pass through probate. Contact Indianapolis Estate Planning Attorneys For more information, please join us for an upcoming FREE seminar. If you have additional questions or concerns about how to incorporate the Indiana Transfer on Death Property Act into your estate plan, contact the experienced Indianapolis estate planning attorneys at Frank & Kraft by calling (317) 684-1100 to schedule an appointment.
What You Need to Know about the Indiana Transfer on Death Property Act
Indianapolis estate planning attorneys
What Happens If I Die Without an Estate Plan in Place?
Protect grandparents
How Estate Planning Can Protect Your Grandparents
Estate planning myths
Debunking Estate Planning Myths

Primary Sidebar

Frank & Kraft, Attorneys at Law

Follow Us

  • Facebook
  • Twitter
  • Linkdin
  • Youtube

Blog Subscription

Signup for our blog to receive our latest estate planning insights!

Where We Are

Frank & Kraft Attorneys at Law
135 N. Pennsylvania Street Suite 1100
Indianapolis, IN 46204-2485
Phone: (317) 684-1100
Fax: (317) 684-6111

See Larger MapGet directions

Office Hours

Monday8:00 AM - 5:00 PM
Tuesday8:00 AM - 5:00 PM
Wednesday8:00 AM - 5:00 PM
Thursday8:00 AM - 5:00 PM
Friday8:00 AM - 5:00 PM

Map

frankkraft_sidbr_map

Footer

  • Advantages of Working With Our Firm
  • About The American Academy
  • Disclaimer
  • Privacy Policy
  • Sitemap
  • Contact Us

Connect with Us

  • Facebook
  • Twitter
  • Linkdin
  • Youtube
footer-logo

Frank & Kraft Attorneys at Law
Attorney Advertisement

© 2023 American Academy of Estate Planning Attorneys, Inc.

© 2023 · American Academy of Estate Planning Attorneys, Inc. | Disclaimer | Privacy Policy | Sitemap | Contact Us