Transferring The Family Business

Families often underestimate the impact of federal estate taxes and the toll it takes on the family business. The federal estate tax "bite" can spell disaster for the family business. This is particularly true if an individual's estate is taxable, the business is illiquid and it is the sole or primary asset in the individual's estate. Experts report that only 30% of family owned businesses make it to the second generation and less than 13% make it to the third. Lack of succession planning, lack of liquidity planning and lack of leadership training are among the primary reasons that family businesses fail to survive across generational lines.

Protecting the family business and its assets from the claims of creditors is another important factor in preserving the business for the next generation. Developing an asset protection or restructuring plan can play a key role in protecting this valuable asset from unnecessary litigation. The choice of business entity and how the business is structured can also have a significant impact on the family's ability to transfer the business to younger family members. The type of ownership interest held in the business, the percentage of the business held by the senior generation and the amount of control to be retained as well as restrictions on transferability all play a role in facilitating a smooth transfer.

For a business plan check up, go to the Download Files section, download and complete the Business Succession Planning Data Form, then submit it.  We will then contact you to schedule a complimentary business check up. 

For more information on our services, please download the Fees and Services memo in the Download Files section.  Thank you.