One business destination is leaving a business to a spouse or perhaps another generation as an inheritance. Transition of a business as an inheritance invokes a number of succession planning options. You might need a will, a living trust, or more involved irrevocable trust mechanisms for tax and transition purposes. You might wish to designate the beneficiary as a partial non-voting owner of a business with the right of inheritance if the primary or voting owner is to pass. You might want to explore intentionally defective grantor trusts, grantor retained annuity trusts, or charitable trusts which transfer business ownership or income from the business sale over time to family members and do so in tax advantageous mechanisms.
This approach would involve comprehensive and consistent estate planning. There are simple approaches, and more complex methods. The structure and complexity depends on the owner’s goals and family dynamics.
Further, the planning should provide for the operation of the business on a temporary basis if you die. There should be a designation of the person or persons who are responsible for the operation of the business until the final transfer can occur.
Every business and family situation is unique. If you are considering leaving your business as an inheritance, you should consult with experienced professionals concerning the structure that is best for you.