Transition Planning

Business Transition Planning
The backbone of the American economy is the family business. The hard-earned fruits of one’s labors are especially sweet when they can be passed along to children without a Draconian tax bill. Protecting the family wealth represented by a closely held business, and promoting the owner’s fervent wishes that the family continue the business is a staple of our trusts and estates practice. Indeed, easing the transition to the next generation and maximizing the value of a client’s business for his or her heirs ranks as one of the most satisfying efforts we undertake.
It is important to note that taxes are not the only reason to consider estate planning and business transition planning with Carpenter, McGuire & Dewulf. The need for such planning goes beyond the tax considerations, as important as they may be. The transfer of assets must be coupled with a close analysis of the transfer of power. We have seen cases where insufficient attention has been given to the personal issues and the resulting conflict only serves to waste the tax savings that may have been achieved.

Questions You Should Be Asking:Questions You Should Be Asking:

⦁ How will my children be able to continue the business and still pay the estate taxes that will come due?

⦁ Will my children understand if I favor one over the others with regard to management of the business, but not the profits? How do I prevent them from fighting?

⦁ Will the son or daughter I choose to give the power of control do the right thing by his or her siblings?

⦁ If I can already anticipate a problem with the children, how can I plan so as to avoid or minimize the cost of litigation?

⦁ When should I start planning for transition and how long does it take?


One solution is the preparation of a long-term “business succession plan” to minimize the devastating effect of estate taxes over several generations. Such plans may include the creation of partnerships, long-term irrevocable trusts and the use of shareholder agreements or operating agreements.