BUSINESS SUCCESSION PLANNING
Understanding family businesses and planning their
transfer from one generation to the next is what Rollings, Shaw & Associates
has been doing for almost 40 years. Family businesses are built on heritage and
tradition. We know the importance of passing the business from one
generation to the next. Increasing values and a restrictive Tax Code
conspire against business owners who want to keep their business in the
family. Unfortunately, the tax laws do not allow you to "give" the
business to the next generation. Limitations on the size of gifts and the
increasing value of businesses seriously affect passing ownership of your
businesses (without a forced tax sale) to your natural successors.
Tax Structuring and a Solid
Plan
Gone are the days when a family could count on Dad and
Mom just handing over the business. The market values of some family businesses
are astounding, and the taxing authorities are just waiting. The I.R.S. and
state taxing authorities know it would take a lifetime to pass a small business
using just the Annual Gift Exclusion. Even the combined husband/wife Annual Gift
Exclusion has little effect on a $2,000,000 business. It takes a solid,
sophisticated, plan to get it done.
We Begin With An
Understanding
Succession planning begins with an understanding of the
family's goals, an analysis of the abilities and resources of the intended
successor, and some hard-hitting questions on the ability of the next generation
to succeed. Commitment, ability, a desire to succeed, and natural instincts,
must all come together before the financial issues can be addressed.
No "One Size Fits All"
The mountain gets even bigger when the financial issues
are approached. It is here that the experience of Rollings, Shaw &
Associates is a necessity. We start with a survey of the various tools and
techniques which accomplish the goals of the family and minimize or eliminate
the potential of heavy taxation. Gifting, long-term purchases, Family Limited
Partnerships, corporate restructuring, and the interplay with your estate must
be considered. Also assuring that the children who are not in the business are
treated fairly is a frequent concern.
Family Limited Partnerships
(FLP)
Rollings, Shaw & Associates understands Family
Limited Partnerships, a sophisticated, and yet very powerful succession planning
tool. FLPs allow the family to:
- Retain operating and financial control in the
parents while passing ownership to the children;
- Shelter the interests passed to children from
creditors or divorcing
spouses;
- Provide an orderly transition of the business,
especially on death;
- Provide tax relief both in the gifting process
and on death of the parents.
Family Succession Planning involves a working knowledge
of the law, taxation, and accounting, as well as the practical sense to bring
them all together. Who understands FLPs? More importantly, who has actually put
them together, valued them and has the practical experience to guide the family
through the Internal Revenue Code, the law and the documents? Rollings, Shaw
& Associates, that's who. We have counseled families and implemented
Family Limited Partnerships from start to finish.
Rollings, Shaw & Associates, P.C. will smooth the
transition to the next generation, and help you minimize or eliminate the high
taxation that can accompany a poorly-planned transfer.
