Family Business Succession: Valuations, Sales, SCINs, and Tax Reform

Description

Successfully exiting a business requires forethought, yet most small business owners have no exit plan. Family dynamics, the nature of the business itself, and the owner's tax situation all significantly affect the transfer.

Will the owner have a taxable estate? Will the business appreciate significantly before the owner's death? What is the business worth? These are just the tax considerations of the sale.

Do the children or heirs participate in the company? What about those who don't--how and should they be compensated? Will the owner continue to be involved in the company? These are a few worthy non-tax considerations.

Before tax reform, many owners gifted portions of the business to children to minimize estate tax. Now with the exemption at $11.4 million, some may choose to leave the business to their heirs ensuring a full basis step-up at death--if the owner doesn't outlive the 2026 sunset.

Whether transferred to an employee, heirs, or an outsider, obtaining an objective business valuation is essential. A business valuation expert will examine trends, incorporate marketability and other discounts, and garner an understanding of the business itself to determine a reliable transfer price.

Listen as our panel of experts explains how to help an owner set up an exit strategy for their family business. They will cover transfers to family members, employee, and outsiders; valuing the family business; and the effect of tax reform on planning for these transfers.