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Cigar business owners are experts in their field, able to craft the perfect blend or manage supply chains from multiple states and countries. But when it comes to planning for the future and what happens when they’re gone, many are less sure where to start. Estate planning is vital for protecting personal wealth and outlining medical wishes, but it is also an invaluable tool for helping businesses survive and thrive through leadership changes.
Taxes
Estate taxes alone can eat a large portion of your business’s value, potentially forcing heirs to sell assets or even parts of the company to meet tax obligations. Federal estate taxes can be as high as 40% of the estate’s total value, and some states additionally levy their own version of estate taxes. By placing your business in an irrevocable trust, you remove it from your personal taxable estate, reducing the total estate value subject to taxes.
Asset Protection
Cigar businesses are worth more than the sum of their parts, but those parts are still valuable. Physical assets, like manufacturing equipment and real estate, and intangible assets, such as intellectual property, can be protected from creditors and legal disputes through estate planning tools like an aptly named asset protection trust.
Business Continuity
Many cigar businesses owe their current success and stellar reputation to the hard work of past generations. This success should continue, even if successors are not yet ready to take over the reins. Current owners can use trusts and buy-sell agreements to facilitate a gradual transfer of ownership over time and appoint interim leadership that steers the ship during emergencies.
Estate planning isn’t something you should run from. If you want your business to succeed in the future for the benefit of your family, call Venerable Law today at 813-680-4530 for a free consultation, or contact us through our website. The earlier you establish clear guidelines for what to do when you’re gone or incapacitated, the easier you and your family can sleep at night knowing your cigar business is protected.