Business Sucession and Tax-Saving Strategies

Most small business owners work very hard on building their businesses, little do they realize that the government will become a fat beneficiary of their hard work if they don't start formulating a tax saving succession plan early on. After a small business has built up substantial assets and net worth, any transfer made through gifting or passed down at the death of the business owner can incur costly gift tax and estate tax.

To help our clients keep their businesses in their family in the event of death or retirement, our CPAs at Starr Judson & Co., LLP, offer our clients advance succession planning while minimizing the tax consequences. Working with our clients' estate attorneys, our CPAs help our clients:

Define and articulate their thoughts.

Translate thoughts into courses of action.

Suggest ways to value the business.

Show how the business will be paid for.

Quantify their choices.

Develop choices into an action plan.

Project the cash flow from each decision.

Structure the transaction to achieve maximum tax savings opportunities.

Structure the payment method, time schedule and nature of the collateral, if any.

Illustrate clearly where each path takes them.

Plan the retirement income for them, their spouse and other family members.

Offer choices to minimize the displacement of loyal, long-time employees.

Assist in planning the business owner's estate.

Coordinating transactions of the succession, the efforts of other professionals, including the attorney, insurance person, appraiser, investment banker, outplacement specialist, realtor and other individuals involved.

Prepare clear presentations for the owner’s spouse and others who are directly affected by the transaction.

Identify problems that may develop among family members who are not involved in the succession plan, and offer suggestions on how to deal with them.

Succession planning isn't a single event; it’s a process that establishes new company ownership and management, and provides the means to put them in place with a reasonable likelihood of long-term success. There are many ways in which a business owner can plan for a tax efficient succession against the unforeseen, unintended and perhaps inevitable future events when the owner can no longer be with the business. If your business has not yet thought of succession planning, don't wait, contact us now to develop a plan that works best for your business and your family's interest.