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Ways to protect yourself if you start a business with your spouse

Getting married to someone whom you respect is invaluable. When you enjoy someone else's company enough that you could reasonably see spending your workday with them, too -- and when you trust their intellect or work ethic to help you get a business off the ground -- you might decide that you want to go into business with your spouse.

Starting a new business is always a challenge, but there are specific considerations that you must think about when your business partner is also your spouse. Protecting yourself, the business and your marriage from the get-go will benefit both of you in the long run.

Understanding tax audit defenses

All those who file tax returns can be subject to a tax audit. Some tax audits are done randomly, but others are initiated after mistakes or possible instances of fraud are detected by the Internal Revenue Service (IRS) or the state.

If you are the owner of a business and you are subjected to a tax audit, you may choose to engage in a tax audit defense. This could help you deal with the process successfully and minimize stress.

Planning your estate as a small business owner

It's always better to start planning your estate sooner rather than later. However, as long as you are considered to be mentally competent, you can plan your estate at any time in your life. If you have a small or medium-sized business, it is a good idea that you consider planning your estate as soon as possible, because your situation is likely to be more complex than most.

Believe it or not, it can take as long as 10 years to adequately plan a more complex estate involving a family business. So if you want to ensure that your legacy lives on after you pass away, you should start considering who you want to be listed as your beneficiaries, and what assets you want them to acquire. The following are four things that you should consider when planning your estate.

Is your child really ready to take over your family business?

For many people, their legacy will involve either what they do in their professional lives or what they do in their personal lives. For a small number of individuals, those two legacies may eventually overlap.

If you have created or at least managed the family business through most of your adult life, you likely have an intense sense of pride stemming from the success and growth of that business. You want to pass the business on to someone you love so that your business can provide for your family in the future and your family can know the joy that comes from running a successful company.

Steps you can take now to protect your estate from challenges

Creating an estate plan or a last will gives you control over what happens with your assets when you die. The same process also helps provide you with peace of mind by making it easier for you to know that your family will have the resources they need when you die.

You will probably put a lot of careful thought into who gets what and why. If you have a trust as part of your estate plan, you may even choose to put rules in place about when a beneficiary accesses those assets and how much they can withdraw at any given time. You can prevent people from using estate assets wastefully or while they are too young to appreciate their value.

Growing your business can mean changing employee positions

It is common for people who start a small business to initially perform the vast majority of work on their own. When you start developing a reputation for excellence, people will begin to seek you out, eventually leading to higher numbers of clients or customers, which means you may not be able to do everything on your own anymore.

It is a testament to your determination and commitment to the business that you could grow it to the point where you would require help with daily tasks. It is likely that you hired someone you already knew or had a previously existing professional relationship with. Quite a few businesses initially hire new staff through informal arrangements.

Important considerations if you start a business with your spouse

You and your spouse trust and respect one another, so it's no surprise that you might think of your spouse as the ideal candidate for a business partner. While you may work well together as spouses, it's important to consider how a business partnership could impact your family life and vice versa.

You need to make certain you have your own space, as well as plans for handling the conflicts that will inevitably arise. With a little planning and foresight, it may be possible for you to successfully start a business with your spouse, provided that you address some key issues as soon as possible.

Treat the end of a business partnership like an amicable divorce

Taking on a business partner is quite a bit like getting married. You pool your resources and work jointly for a specific goal, probably spending a lot of time together in the process. The business that you build up is a lot like the children you could share with a spouse. It is something that you both love, work hard for and have pride in.

Still, like any relationship, it is possible for a business partnership to falter and fail. Sometimes, business partners grow apart over time. It is also possible for there to be a breach of trust or a divergence of wishes between the partners that leads to problems in the relationship and then in the business. Maybe one of you falls ill or needs to move across the country.

How do you transfer your family home into a trust?

There are many reasons that people want to create a trust and fund it with their home. Maybe you work in a risky profession and worry about the potential for a lawsuit that could leave your family vulnerable if someone comes after your personal assets. Perhaps it is part of a broader estate planning strategy to mitigate estate taxes and reduce the risk of your heirs abusing the assets you leave behind. There are many potential benefits to such a transfer.

Regardless of why you have decided to transfer your Pennsylvania home into a trust, you need to make sure that you do so properly. As with any estate planning or real estate efforts, it is almost always beneficial to seek legal counsel throughout the process to avoid making mistakes that could lead you and other people you care about financially and legally vulnerable.

Succession planning is a critical step for business owners

Many people begin their own business because they want to provide a good standard of living for their families. That motivation is why responsible adults also create an estate plan to ensure the smooth transition of their assets in the event that they become incapacitated or die.

All too often, business owners planning their estates overlook succession planning for their business as part of their comprehensive estate plan. Succession planning involves creating a legal framework for someone to take over your role and an explanation of the duties that they must fulfill.

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