You’ve worked hard to build your business. What are you going to do to make sure you keep your success in your family when you retire or die? Business succession planning is one of the most important components of advanced planning for holders of medium and large estates. It is not enough to simply appoint an adult child or other beneficiary as the president of your company. The right business succession plan also examines tax consequences of the transfer, risk assessments to avoid possible litigation from other shareholders, provisions for funding transfers and protection for successor owners and managers.
Haymond Law serves business owners in Utah as their advanced estate planning law firm. Our attorneys work closely with clients to ensure optimum provisions for the transfer of business interests to the next generation, from tax as well as non-tax perspectives. This includes consideration of family dynamics and your wish to minimize conflicts among family members and co-owners. We have particular expertise in designing family limited partnerships and limited liability companies, and in utilizing buy-sell agreements, often including life insurance arrangements, in a variety of situations.
Lifetime estate freezes, intended to shift the income or appreciation of the business to younger generation beneficiaries, must comply with Internal Revenue Service guidelines to avoid adverse gift and estate tax consequences. Our experience in tailoring partnership and operating agreements within such guidelines facilitates tax-advantaged transfers of business interests to our clients’ family members.
When personal business interests are to be transferred at death, the terms of such transfer should be integrated with the client’s overall estate plan in order to minimize intra-family disputes and to protect the beneficiaries. Estate planning for business interests also includes consideration and implementation of special tax provisions intended to reduce or defer income tax, capital gains tax and estate tax.
One of the most critical issues in business succession planning is the process by which an interest in the business will be valued at the time of its subsequent transfer. In evaluating the appropriate method, we consider the specific purpose of the contemplated transfer as well as the future feasibility of the process. We work closely with appraisers and related valuation experts during both the planning stage and after the transfer. Having certified public accountants to involve with clients’ planning, we also advise our clients in connection with the reporting of their transfers on gift and estate tax returns.
Charitable giving in an estate plan does not just involve leaving money to a charity upon death. At every stage in life, everyone can take advantage of the tax benefits of charitable contributions even through a living trust, while supporting the social causes that are most important to them.
Haymond Law can help you look at your current financial situation and determine the best way to meet your charitable giving wishes, while benefiting fully from the tax advantages and other protections afforded by a charitable remainder trust, a charitable lead trust, or a family foundation. If such charitable entities are properly created, you can leave the extra benefit of protecting your assets from creditors, tax judgments, divorce settlements, and the required spend-down for long-term care.
We Will Help You Determine the Best Way to Give
If you are an individual or family of high net worth, it can be very valuable to establish an advantageous manor to support a 501(c)(3) nonprofit or faith-based organization. There is no one-size-fits-all solution in a comprehensive advanced estate plan. The attorneys at HAYMOND LAW work closely with qualified accountants and financial planners to determine whether a family foundation or donor advised fund is your best choice to meet your long-term planning needs. By looking at your complete tax situation, family circumstances and funding options, our experienced estate planning team can help you fulfill your charitable giving desires at every stage of life and income level.
We have extensive experience in all areas of trusts relating to charitable giving, including:
- Charitable lead trusts: These reduce the taxable income by distributing a portion of the trust’s income to charities. After a specified period of time, the remainder of the assets goes to your beneficiaries tax-free.
- Charitable remainder uni-trusts (CRUT): While the trust creator is alive, a CRUT distributes a fixed percentage of the value of its assets to the trust creator or to a non-charitable beneficiary. After death or a pre-set period of time, the remaining CRUT assets are distributed to charity.
- Charitable remainder annuity trust (CRAT): Cash, securities, real property, or other assets are transferred into a trust that pays the trust holder income at a set percentage for life or a pre-set number of years. Upon termination of the trust, the remaining assets are distributed to the charity.
- Family foundations: Family foundations are often set up to distribute funds to a variety of charitable organizations. A family foundation affords the benefit of supporting special charitable purposes; producing a vehicle for family members to work together for generations in worthwhile charitable endeavors; providing compensation to family members for their efforts; fostering the activities and services set forth in the foundation documents.