Succession planning in a family business involves several critical issues, one of which is transferring ownership through a family trust. NFIB has a good summary of this approach.
“A living trust is an estate-planning device that bypasses probate. It’s a separate, legal entity, like a corporation. While you are alive, you would be the trustee and beneficiary of the trust. You would run your business just as you do now. The only difference? A trust that you control would own the business.
“Because it is your trust, not you who owns your business, there would be nothing to probate after your death. Because your child is the successor of the trust, or the beneficiary, he or she would end up owning the business without going through probate.”
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