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Should I transfer my business to my children when I’m ready to retire?

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Should I transfer my business to my children when I’m ready to retire?

The answer to this question depends on a lot of different factors. Below, we will cover some of the common concerns we hear from business owners who want to transfer their business ownership to their children. However, we always encourage you to contact an experienced Ohio business succession planning attorney to discuss your unique circumstances.

First, Answer the Hard Questions

Before you can decide how to transfer your business to your children when you retire, you must consider whether it is something you want to do and whether your children are prepared to become business owners. Specifically, we encourage you to answer these questions:

  • Do your children want the business?
  • Do your children have the education, experience, or qualifications to run the business?
  • Are all of your children going to become co-owners of the business? If not, do you want to provide for the children who aren’t interested in the business another way?
  • Do you anticipate the business succeeding with your children as owners?
  • Is there anyone else, such as a dedicated employee, whom you want to consider as a potential owner?

If your children want the business and you want to leave the business to them, then you need to decide how to do it.

Next, Consider How to Transfer Your Business

There are different ways to transfer business ownership, and they each have their own tax consequences and impact on your retirement income. For example, you may decide to make a gift of business ownership to your children, sell the business to your children, or set up a trust to transfer ownership to your children. Whatever method you chose must be in accordance with the ownership rules for your business structure.

You have put a lot of hard work into building your business, and it may bring you great joy to see your children excited to take over the business. However, to make this a successful transaction for both you and your children, you need to make the right legal decisions. Contact us today to learn more.

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