If you run a family business, part of your estate planning decisions will likely involve how you will step out of your role in the family business and who will take over after you are gone. Building a succession plan is similar to creating a will, but it has some special considerations regarding the particular needs of your business, taxes, and your heirs.
How you transfer ownership of your business to your children or grandchildren (or other family members) will depend on whether you plan to hand over your business at the time of your retirement, or maintain ownership of your business until the time of your death.
If you wish to transfer your business to siblings, children, grandchildren, or other family members at the time of your death, you want to do so in such a way that the business maintains as much of its value as possible. Keep in mind that your business is subject to many of the same tax implications as the rest of your estate. Good succession planning can protect your heirs from losing the value of the business they are inheriting to gift and/or estate taxes. It can also help maintain business stability in the event of your death, allow you to prepare ahead for tax obligations, and ensure that the ownership transfer goes smoothly.