Estate Planning Isn't All About Taxes By Sam H. Lane, Ph.D.

Did anyone seriously think the estate tax was going to disappear as the law states?

Some of the new elements are still in flux, and some of the most oft talked about changes would ease the burden on a great number of family owned businesses.

While estate planning is an important consideration and should be included in a family’s plans as they contemplate transitions from one generation to the next, we don’t think saving taxes should be the tail that wags the dog.

Estate planning is about far more than saving inheritance taxes. Estate planning sets out the flow and sequence of ownership to future generations, which is a critical consideration in planning for the future of the business. It is critical to make sure the estate plan “works” for the family as well.

Another important aspect of estate planning is the types of entities used. For example, a trust is a fairly common estate planning device. While we think this is usually a good idea, it behooves the planner to think through such issues as the most propitious trustee, the successor trustees as well as having clarity about the purpose of the trust. A trust that houses ownership in a company needs to be well thought through.

Bill Roberts has just completed a helpful Monograph on estate planning for family owned businesses, Estate Planning For Family Business (Monograph #16).