We assist individuals in preparing comprehensive, affordable, tax-advantaged estate plans to protect their assets and their families, including wills, trusts, powers of attorney, and advance directives.
Divorce, Family Law & Estate Planning > Business Succession Planning
Montana Business Succession Lawyers & Attorneys
For many Montana ranchers, farmers, and other business owners, an important concern will be how to pass their business to the next generation in an efficient and tax-advantaged manner. This is especially the case for ranching and farming operations that may have been in the same family for generations.
Our business succession lawyers work with business owners to develop plans which will ensure continuity of the business from one generation to the next, and which will provide the greatest tax advantages.
Entity Structure and Management Concerns
Often, business succession planning and transfer will involve trusts, LLCs, operating agreements, and an entity structure that can best hold the business operations for future generations to ensure business continuity. This is especially important in ranching and farming operations, when a land partition would likely severely impact the value of operations. We advise clients as to the best entity structure for business succession based upon their objectives and anticipated operations, and assist in the formation of any needed entity and the transfer of assets that may be required.
A critical component of successful business succession concerns creating a management plan that is likely to last several generations. While the future managers of the business may not be known, voting rights and other measures can be implemented that can make it less likely that a business will be negatively impacted over a split as to how the business will be run. While not all events can be anticipated, we work with clients to determine how certain disagreements should be resolved so that effective dispute resolution mechanism provisions can be drafted.
What if a Family Member Does Not Want to Work in the Family Business?
Often a ranch or farm may have been in the same family for generations. What should happen, for example, if not all of the next generation of children wish to continue in the family farm or ranch – should they be given an equal ownership share after the parents pass?
In considering succession planning, it will be extremely helpful for the parents/owners of all businesses to have conversations with their children to determine the interest of each child in continuing with the family ranch, farm, or other business so that specific succession issues can be addressed. Knowing the interest of each child will be critical to both estate planning and business succession planning.
When not all children wish to participate in the family ranch, farm, or other business, it’s important for the parents/owners to consider that when it comes to distributing their estate to their children. Fair does not need to mean equal.
It may be advantageous, for example, for the children who will not be involved in the family business to be given assets or “bought out” after the death of the parents. Under this scenario, the children who will run the ranch, farm, or other business will have full control over operations, and the child who lives in another state will have received a fair share of the parent’s estate.
Keeping Business Interests in the Family
Generational businesses and succession also requires careful planning to ensure that a family business ultimately is passed down to blood relatives. Divorce and re-marriage can affect this objective if proper planning is not undertaken.
For instance, if an adult child of a ranching family divorces, it will be important that the soon-to-be ex-family member not receive any interest in the ranch as part of the divorce. We help business owners keep the business in the family by anticipating matters such as a divorce. Prenuptial agreements should be considered particularly for second or subsequent marriages.
Every Family Business is Unique
We work with family owners to consider these and other scenarios so that they can determine what is best for them and for their family.
We invite you to call us so that we can learn about your business and how we can help.
- Ranching & Farming Succession Planning
- Succession Planning for Other Family Businesses
- Tax Minimization
- Pre-Nuptial Agreements
- Business Creation, Including Corporations and LLC's
- Operation Agreements