We often come across a surprisingly large number of business owners who struggle with this very issue, as it is both a monetary and an emotional decision. The most common approach is to give other non-business estate assets to those not receiving any interest in the business with the goal of equalizing the value received by everyone.
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.
