Analysis & Restructuring of Assets to Meet Client Objectives
A closely held business often makes up a disproportionately large percentage of the value of the business owner’s estate. While this may present challenges in the preparation of an estate plan for the business owner to minimize estate tax liabilities, our experience working with business owners allows us to formulate strategies that address legal, tax, asset protection and other considerations.
Effective analysis and restructuring of the client’s assets, both business and non-business, requires careful and strategic consideration of both business and estate planning objectives. These considerations include:
- Analyzing estate tax considerations for the business owner and spouse. Transferring assets to a spouse may allow the spouse’s estate to more effectively utilize estate tax exemptions.
- Proposing options for gifting business equity to a spouse or family members. Effective gifting removes appreciation in value and future income from the business owner’s estate. Further benefits are available by using discounts in transferring minority interests, or through leveraging techniques, to further drive down values and minimize or eliminate tax.
- Restructuring the business to create voting and non-voting equity. Gifts of minority interests in non-voting equity may allow for the transfer of value to certain beneficiaries, while allocating voting control to those managing the business.
- Reorganizing and establishing business entities to better manage risk, achieve estate planning goals, align effective leadership and management, and provide cash flow controls. This may include layering business entities in parent-subsidiary, brother-sister structures or other formations linked with trusts.
- Reviewing life and disability insurance, deferred compensation and other assets associated with the business and intended to fund the purchase of a business owner’s equity in the business at retirement, disability or death.
- Naming proper beneficiaries for retirement plans and life insurance to minimize income and estate tax liabilities, and ensure coordination with business and estate plans.
- Reviewing loans, personal guarantees and other financing terms for the business in connection with the protection of the business owner’s personal assets.