You may be running your business for years without any thoughts of selling and then suddenly receive an offer to buy your firm. It could be from a private equity group, a competitor or a key customer or supplier.
The estate tax exemption raised by the Tax Cuts and Jobs Act will sunset in five years—possibly sooner, as the new Congress gears up for a Biden tax overhaul.
No one can predict the future—and navigating that reality is precisely what makes estate planning so complicated.
Many baby boomers may hesitate to discuss money with their children. However, the reality is that a massive amount of wealth will be transferred in the next couple of decades. Cerulli Associates estimates that about $68 trillion will move between generations within 25 years, with most of those assets transferred to Generation X households.
If you plan to pass your business to your offspring, there is more to keep in mind when creating your succession plan than your descendants—there are also their spouses—especially if they become ex-spouses.
Studies have shown that the number of family businesses owned by second generations and third generations dramatically decline for a number of reasons. One large reason is the lack of business succession planning for the family business.
Planning is one of the most important aspects of managing any business. This is especially true for farms and agribusinesses, due to their complexity and the inherent uncertainties associated with agriculture.
Estate planning can help you pass on assets to your heirs, while potentially minimizing taxes. When gifting assets, it’s important to consider when and how the generation-skipping tax transfer (GSTT) may apply.
We currently have the highest estate tax exemption and the lowest intra-family interest rates in history. That combination alone is significant, but when mixed with the potential for lower estate and gift tax exemptions and depressed business valuations, you have a potent catalyst for transitioning ownership.
If you have not already been inundated with invitations to webinars, articles and newsletters regarding estate planning, you should consider doing so before the end of the year, since you undoubtedly will receive these over the next few months.
