Estate Planning for Maine Drug Store Owners

By Brad MacLiver
Authorship and profile at Google


With the current market many Maine drug store owners are experiencing lower profit margins, and have considered selling. A drug store industry roll-up has been going for years, consolidating the drug store seller's customer traffic into fewer drug store locations. There are however a number of pharmacies that are not in a geographical location with other nearby pharmacies, such consolidation can not take place. Some Maine drug store and drug store owners, despite their location or what is happening in the industry, has taken a stand and will not consider selling. But like paying taxes, an exit of the company is ultimately inevitable.

Estate Planning is a subject that many people, in all industries, timid. The Maine drug store owner who works 6 days a week, taking very few vacations, fill scripts all day, then mops the floor and makes the books at night, it usually is not much time to consider additional things like estate planning. But, knowing that it will be a transfer of business, it is essential for drug store owners to consider a proper succession plan for the Maine drug store business.

Develop a plan to transfer operations will be time consuming, but done correctly allows the company to be successfully transferred in an acceptable manner. An estate plan for a drug store owner need not be immutable process. Fine-tuning, updating, and changes recommended by government regulation, economic conditions and personal expectations change.

Estate planning allows a Maine drug store owner to anticipate and provide for the transfer of the store. The plan will be formatted in an attempt to eliminate uncertainty, to assist the transfer by trimming costs and cutting taxes.

Process may involve Trusts, wills, living wills, Power of Attorney, Medical Power of Attorney, Business Valuation, Life Insurance, a charitable remainder Trusts, Buy-Sell Agreements and other legal documents. All aspects of estate planning for the drug store owners coordinated guidelines.

If there are non-family members as partners in the Maine drug store business, it is essential that estate planning include a Purchase-Sale Agreement. A buy-sell agreement, governs the transfer of business between the drug store partners. The agreement may also be known as a partner buyout agreement, or a company wants. To protect the family in the event of death of a partner, buy-sell agreement funded with life insurance.

Estate planning, buy-sell agreements, and transfer of the drug store should include a drug store valuation completed by a third party expertise in the pharmaceutical industry to take a large number of pharmaceutical companies perform annual appraisals, and the current industry data as a basis for conclusions. Using simple accounting formulas, multipliers, and valuator inexperienced in pharmacies will not provide an accurate business valuation.

Most Maine drug store owners spend a large part of their lives to build the business. The effort should not disappear because the drug store owner refuses to accept their mortality, and plan accordingly. The only pharmacist in a small town is often drug store's owner. If the script can not be filled by a licensed pharmacist since the law the client files must be transferred to another drug store. Because of this, a drug store business value fall to a negligible figure in just a few days after the death of the owner. Contingencies outlined in an estate plan should address this issue. Unfortunately, due to not having an effective plan in place, each year a number of drug store owners die and their families are left with an asset with very little value.

Tips:

1. When the family drug store is the only means of income for many families it becomes more essential to have a set plan in place.

2. To avoid disputes should estate plans should be developed with clear directives.

3. Minimize tax liabilities is an essential goal for most people to complete an estate plan should be an expert tax advice should be sought.

4 Many online documents and books are available that provide advice and documents to develop an estate plan. When you go to self-help route, it is advisable to have a paid expert review the completed documentation to ensure that it can be legally respected when the time comes.

5. While developing the farm plan, it is essential to talk with children and other family members of the drug store market owner especially if there are any family members who work in business and others do not.