Estate Of Affairs

If you've already done long-range planning for your company, you've probably established a way to transfer ownership when you pass on. But do you know what the tax consequences of such a transfer will be? Are you clear about what taxes your heirs or the other owners in your business will have to pay and how they'll pay them? According to tax experts, trouble may lie ahead for small-business owners who don't know the answers to these questions.

Before examining the tax consequences, however, a word about planning. Properly planning for business ownership transfer is as important as writing a will, experts say. The planning process forces you to iron out how ownership will change hands and how to pay for the transfer in the event of death. Putting this information on paper gives you the confidence of knowing you won't be leaving your business partners or family in a bind when you die.