Penny Wise or Pound Foolish

Tuesday November 1, 2016 Published in Corporate and Business, Trusts and Estates
Aerial Shot: From Outside into Office Building with Businessman Looking out of the Window. Shot of The Financial Business District Skyscrapers in the Evening.

When it comes to estate planning for your business, many owners think “Oh, my family knows what to do when I die” or “I just want something simple.” When questioned further, it almost always turns out that the initial response is a result of the fear of a large legal bill or fear of the unknown. However, as certain as death and taxes is the certainty that if left unaddressed, the transfer of business ownership will always cost more both monetarily and in terms of stress for those you love. What appears on the surface as “simple” to the business owner with historical knowledge of the company and its operations is anything but simple to the family and co-owners of the deceased business owner. Only once have I had a client tell me that he purposefully wanted to leave a mess for his family after his death. Obviously, that is not the norm.

Proper planning for your business succession necessarily involves more planning than the average Will, but it doesn’t have to be overly complicated either. If you are the sole owner of your business (whether a sole proprietor or as an entity), it is still necessary to address how the transition will take place after death in order to avoid having the assets of the business (if a sole proprietor) or the shares/unit interests in an entity go through the probate process and create a public record of the value of the business. However, when you have co-owners, planning becomes even more crucial. How do you intend to purchase the equity the spouse/family of the deceased co-owner? How will you fund the replacement of your co-owner? Do you want to place a different value on the buy-out in case of death or disability as opposed to divorce or termination of employment? These are very important questions and ones that can be addressed by meeting with your attorney and other trusted advisors such as your CPA to begin the discussion and navigate the issues.

Remember, starting the discussion is half the battle. We can help discuss various triggering events and various valuation methodologies and payout scenarios to preserve cash flow for use in death, disability, divorce, termination or any other trigger that may fundamentally affect your business.

It’s that time of year again and as you make your plans to address year-end tax planning, remember to also address the issues of business succession planning and make sure that you aren’t an owner that creates a mess for your family!


Wegman Hessler specializes in business law for business leaders, applying legal discipline to solve business problems to help business owners run smarter. For more than 50 years, this Cleveland business law firm provides full-service strategic legal counsel for closely held businesses. Learn more at www.wegmanlaw.com.

Related Stories

IRS halts ERC Claims, and what to do next

IRS Halts ERC Claims Due to Dubious Submissions


Worried About Your ERC Claim? Here’s What You Can Do As a small business owner, you may have come across the Employee Retention Credit (ERC) program offered by the Internal…

Read More

Wegman Hessler Valore Recognized Among “Best Law Firms” in Northeast Ohio


Cleveland — Wegman Hessler Valore is being recognized among the “Best Law Firms” in the Cleveland area for 2024 by U.S. News &World Report. Several attorneys at the firm are…

Read More
NLRB Rules changing - owners need to review employee handbooks to comply

A Significant Change to Employee Handbook Rules: Understanding the New NLRB Standard


By HR attorney Lorraine M. CatalusciWegman Hessler Valore In the continually evolving landscape of labor laws, staying abreast of the latest legislative changes is key to maintaining legal compliance and…

Read More