The “Old Company” to “New Company” Technique

You have made up your mind that you will transfer ownership of your company to an insider — whether it’s your children or key employees. However, you may not be ready to turn over total control of the company just yet. In fact, you may want to make sure you can undo any damage that could result from your successors failing to successfully carry on the business, as well as failing to pay you in full for the business.

Determining How Much Wealth is Needed After the Business Exit

When creating an effective, tax-efficient wealth transfer strategy, you should focus on three basic issues that should be resolved for successful wealth preservation planning to occur. These issues include:

Fixing your financial objectives before considering a wealth transfer.

  1. Determining the amount of wealth to be transferred and identifying how much is too much.
  2. Designing a wealth transfer strategy that keeps the IRS from becoming the largest beneficiary of your hard-earned cash.

Five reasons owners sell their companies to their key employees

Five reasons that owners actually do sell their companies to their key employees:

  1. Owner has already achieved financial security. Owners who have already achieved financial security (separate from and prior to any sale or transfer of their companies) enjoy the luxury of selling to their key employees. They may have wanted to sell to them because they felt they “owed” their employees or even because they had promised to do so, but the reason they actually do so is because their own financial independence is secure.


An Employee Stock Ownership Plan (ESOP) is a tool business owners use to achieve many common Exit Objectives:

  1. Provide partial or full liquidity for existing shareholders;
  2. Leave the business gradually;
  3. Provide employees with a stake in the future growth of the business; and
  4. Keep the business in the community.

To read more please check out the details in this PDF.

What Is Your Business Really Worth?

For many owners, the answer to one question determines whether they can leave their companies: “How much money will I get when I sell?”

This question is critical, and answering it is Step Two of The Seven Step Exit Planning Process™. Realistically, you can’t exit your business unless you achieve financial independence, and the primary source of that independence is likely to be the funds you receive for your business when you leave.

TAX UPDATE: Proposed Regulations May Impact Family Entities

Family-controlled corporations and partnerships are often utilized as part of a family wealth transfer plan as vehicles for managing and controlling family assets, especially in the context of succession planning for family businesses. Family-controlled entities are attractive, in part, because of the ability to make gifts or bequests of interests in the entity to family members at a reduced tax cost using valuation discounts. The value of the interests transferred to family members is often subject to valuation discounts because of various restrictions imposed on the recipient’s ability to participate in management,

Six Estate Planning Questions for Business Owners

James Keefe sat nervously in his Exit Planning Advisor’s office. Until the day before, he had been president of Keefe Automotive Sales, one of the region’s largest new car dealerships. Now he was out of a job and felt he was a victim. Naturally, his first thought was to sue those responsible for his misfortune. The targets of his wrath were his younger sister and his mother. They had forced him out of the business.

Qualified Income Trust to Help Pay for Nursing Home Care

Florida is an “Income Cap State” with regard to eligibility for Medicaid benefits to pay for nursing home care. That means that if the nursing home resident’s income exceeds the income cap”, he or she will not be able to qualify for Medicaid benefits to pay for their nursing home care, unless a “Qualified Income Trust” is implemented.  [A “qualified income trust” is often referred to as a “QIT”, a “QIT Trust”, or a “Miller Trust”.]

For 2012,

The Advantages of a Well-Conceived Buy-Sell Agreement

In the previous blog, we made a strong case for creating a buy-sell agreement for co-owned businesses.  To summarize, if owners agree in advance of any transfer event about how to appraise business value, and about the terms of payment, they can avoid the heated and often damaging negotiations that can occur when one owner leaves the company.

We continue making our case by outlining several other advantages of a (well-drafted and recently-reviewed) buy-sell agreement.

Preparing For Your Exit: Planning For Your Inevitable Exit

With over half of today’s 9.5 million owners of established businesses reaching the retirement age of 50 years old or older it is likely  that many of you will be ready to leave your business within the next decade or so1. What have you done to plan for that day?

What are you waiting for? How could planning for the biggest financial event of your life not be worth your time and effort?