Personal Tax Planning:
While evaluating the company’s tax status, business owners considering a sale should simultaneously consult with an experienced deal accountant to evaluate their personal options for maximizing post-tax value. There are a variety of tools that can be used to defer or eliminate tax liability, but they need to be planned for well in advance.
Since mortality is a subject that many hard driving entrepreneur owners often don’t want to discuss, I regularly talk to business owners that have highly valuable businesses, but have neither taken steps to ensure that their families are protected in the event of catastrophe, nor taken advantage of estate planning tools available to increase the value realized in a transaction. Business owners thinking of a sale should consult with a financial planner and/or estate planning professional well ahead of a potential transaction.