The decision whether and how to best transition out of your business is seldom easy. Several key factors may include: (i) financial needs moving forward for you and your family; (ii) your desire to remain involved in the business in some capacity; (iii) the involvement of business partners and/or family members; (iv) the impact of income and/or estate taxes; and (v) market conditions.
That question is really just another way of asking “Have I saved enough to provide for myself for the rest of my life?” You must weigh whether a lifetime gift jeopardizes your retirement needs— including long-term care costs—against the enjoyment of seeing loved ones or charities benefit from your gifts. Generally, people wealthy enough to plan to avoid federal estate taxes can afford to give some gifts during their lifetimes.
Take steps now to secure your future while reducing taxes on your estate.A number of tools are available to help you ensure your firm’s future, reduce the size of your estate, and lessen your tax liability.Stock redemption, special-use valuation, and discounting stock can all help to ease the estate tax burden.Entities such as LLCs and charitable trusts also offer unique tax minimization benefits.