It is disheartening to see a family business that at one time flourished, crumble when the head of the business passes away and a lack of planning failed to make sure that the success of the business carried on for future generations. In some instances, this lack of planning can manifest itself in the business being forced into liquidation to pay estate taxes.
Successful business succession plans can be detailed with the assistance of an experienced estate panning attorney. One avenue many settlors will pursue as part of a comprehensive business succession plan is establishing a revocable living trust. This will keep the business free from the probate estate when the head of the business passes away. Further, the business owner is able to name a successor trustee upon their passing, making sure that control will fall into the correct hands to ensure that business transitions can be conducted privately and smoothly.
In-N-Out Burger is a successful family business that has continued to flourish in spite of several familial deaths, some of them unexpected. Presently, the company is set to be owned by the granddaughter of the man that opened the first In-N-Out Burger, making the now 30-year-old the youngest female billionaire in the country.
A trust was established which granted the granddaughter half ownership at 30, and then full control at 35. Previously, the business was run by the widow of the man that started the business, when she passed away in 2006 there was a clear succession plan. While there were a few hiccups that needed to be worked out in a Los Angeles probate court over disputes, everything appears to be transitioning smoothly at present.
While most family businesses in Los Angeles are not worth billions of dollars, the profits still are a substantial means of living for many families and the continued health of a family business is an important interest to protect through estate planning.
Source: Financial Post, "Meet America's youngest female billionaire," Seth Lubove, Feb. 5, 2013