Many business owners are struggling right now, but there’s an opportunity for savvy professionals to use this time to take advantage of some estate planning tricks. Here’s what I mean.
Most of us are working from home these days, and you’re probably asking yourself how you can be more productive in light of all these circumstances. Today I want to give you an idea of how to proceed if you have an estate that you will want to transfer to your children someday without paying a lot of estate taxes.
You might think that right now is a bad time to talk about estate planning, but it’s actually the best time. Here’s why.
There’s a good chance that your business is struggling right now. Your revenue and profits are down, and you’re wondering when the economy is going to restart—the last thing on your mind is estate planning. Let’s say, for the sake of simplicity, that your estate is worth $1 and your business makes up a huge portion of that dollar. It’s very essential to protect the business by planning ahead and avoiding a future 40% estate tax. Your $1 might be worth $5 or $10 in just a few years.
Right now, if we did a valuation on your business in its current condition, is it still worth that $1? Maybe right now it’s worth 75 cents or 50 cents, but once the economy recovers, it could be worth $4 or $5. If you have that kind of business, you can estate plan now for a business that’s worth 50 cents and gift it, transfer it, or sell it to a trust for the benefits of your kids and successors when it’s eventually worth over $1. That’s some huge leverage that you can get by doing the transfer today.
If you need help with a situation like this or just have any questions, don’t hesitate to give me a call or send me an email today. I look forward to hearing from you.