Thursday, December 29, 2016
Matthew S. Bart recently published an Article entitled, The Power of Preparation: Help Your Client Develop Strategies in Advance of Selling His Business, Tr. & Est. (Dec. 2016). Provided below is a summary of the Article:
A client’s decision to sell his business may be the single most important decision he makes in his lifetime and requires him to apply the same level of care that made him successful in business to planning for life after the sale is complete. The decision made in the immediate years before the sale is completed can have a tremendous impact on the wealth created and preserved for future generations.
Selling a business results in unique challenges for the owners of privately held businesses. The sale of the business itself requires extensive and effective planning. Assembling the right team of advisors—attorneys, accountants and investment bankers—helps to ensure that the owners receive the most value for the business that they built. The sale of the business also converts wealth formerly held within the business to liquid assets, often to a level beyond the owner’s imagination. That “new” wealth needs to be structured and managed to meet the goals and needs of the owners for both their own lifetimes and for future generations.
Here are some steps you can help your clients take to prepare for the sale of their business to maximize the value transferred to future generations, provide protection from creditors and minimize estate taxes. There’s no one-size-fits-all approach to this kind of planning, as each situation has different facts and circumstances. I’ve come up with the case study below to provide insight into the different tools you can discuss with your clients.