Small business owners in Ohio would be well advised to take a look at the benefits of estate planning for transferring one's share or its value to their heirs at death. This will usually involve a mix of legal instruments drawn from both estate planning and business law agreements to make the transition easier and ultimately more lucrative for one's heirs. The complicated tax issues that may arise in this context are best determined and planned in consultation with an estate planning attorney and a tax expert or qualified financial planner.
Estate planning may be used to make the complications of business succession easier to carry out. Trusts and a will may appropriately leave business assets to specified heirs or in some instances it may be prudent for the owner to provide for the transfer of his or her share to a business partner or other disinterested party. In that event, a buy-sell agreement will be drawn up to set forth the terms of the transfer, the price and how to calculate it, and all other relevant provisions.
The payment of the price to the estate or the specified heirs may be funded in advance by life insurance. A policy may be purchased in advance specifically for this type of transaction. Where the business will be carried on by family members after the person's death, the business assets may be transferred by will.
There may also be additional business agreements necessary to maintain the desired functioning of the business. When preparing an estate plan, certain procedures and appointments will be necessary under Ohio law. Estate planning requires that a personal representative or executor be appointed to carry out the owner's wishes at death and to otherwise engage in processing the person's estate. A power of attorney is necessary to engage on behalf of a person who has become unable to act in his or her own behalf.