This is necessary because many tax planning strategies will save tax dollars at one income level, but will create a larger tax bill at other income levels. Once you know what your approximate income will be, you can take the next step: The effort to come up with crystal-ball estimates may be difficult and by its nature will be inexact.
Quick Estate Planning Tips for a Restaurant Owner Implementing basic estate and business succession planning can provide numerous benefits and peace of mind. The quick-service restaurant industry involves a rapid pace of business for the owner or franchisee.
Accordingly, such individuals often neglect to plan for the future. It is important, however, to slow down and consider what would happen if the owner or franchisee became incapacitated or passed away unexpectedly.
Implementing basic estate and business succession planning can provide numerous benefits and peace of mind to a quick-service restaurant owner or franchisee and his or her family.
Every quick-service restaurant owner or franchisee should have a basic estate plan.
An advance directive for healthcare and a durable financial power of attorney will allow an agent to exercise healthcare and financial decision-making on behalf of an individual if they become incapacitated. The catalogue should be kept in a safe place where family members can locate it if needed.
A franchisee or quick-service restaurant owner should also consider business succession planning at the outset of any venture. A prospective franchisee should review franchise agreements carefully before signing.
The franchise agreement may impose restrictions on future transfers, which could hinder estate planning, although these terms are normally negotiable. Such agreements may also have transfer restrictions, which could impact estate and business succession planning. The quick-service restaurant owner or franchisee who has business partners should also consider introducing buy-sell agreements into their business.
Buy-sell agreements clearly define the rights among partners with respect to the disposition of an interest in the business, and can create a more efficient and consistent exit for partners.
In forming any business succession or estate plan, a quick-service restaurant owner or franchisee should consider whether to begin to transfer interests in the business during life or at death. A basic understanding of federal wealth transfer taxation is imperative in any estate or business succession plan.
If a lifetime gifting plan is implemented, valuation discounts on fractional interests may be obtained which further reduce the cost of the gift for transfer tax purposes. A quick-service restaurant owner may consider establishing an irrevocable trust to which he or she may gift or sell business interests.
Such a gifting or selling strategy may provide tremendous tax benefits while increasing protection of the assets from creditors. There are numerous business succession and estate planning strategies, from basic to complex, which may be available to a quick-service restaurant owner or franchisee.
While a quick-service restaurant owner or franchisee may be busy, it is important to slow down and consider these strategies. Scot Kirkpatrick is a shareholder at Chamberlain Hrdlicka Atlanta and leads the Atlanta office trust and estates practice group.
Hispractice focuses principally on estate and income tax planning for high net worth individuals and their businesses. Waddell is a shareholder at Chamberlain Hrdlicka Atlanta in the estate planning and administration practice.
He maintains a multi-faceted practice focused on the issues and concerns of business owners and franchisees, including contracts, mergers, lending, acquisition of real estate, corporate and business succession and wealth preservation.
Heymann is an attorney at Chamberlain Hrdlicka Atlanta in the estate planning and administration practice. He focuses primarily on the creation and implementation of complex estate plans for high net worth individuals which include the use of wills, revocable trusts, irrevocable trusts, charitable donations and lifetime gifting strategies.Creating the future you want is a process that needs to be navigated with expertise, particularly with longer life spans, increasing health care costs, changing tax regulations, the rising cost of education, and providing a happy and healthy retirement.
Everything individuals and businesses need to know about filing tax returns, reducing tax bills, and avoiding or preparing for an audit.
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