When the Business Must Be Sold Outside the Family: Key Negotiating and Tax Issues

When the Business Must Be Sold Outside the Family:Northeastern University
Key Negotiating and Tax Issues

Family Business Quarterly
by Stephen Minson and Gary Hayes

As accountants for closely held businesses, we are normally concerned with the transition of a family business to the next generation. In some cases, however, it may be impossible for the business to be passed on to the next generation. For example, the owner of a closely held business may not have children who are interested or qualified to run the business. In this situation, the owner may have no choice but to plan for the sale of the business.

In this event, a number of important issues should be considered. Once a potential buyer is identified, there is normally a period for due diligence, during which the buyer and seller exchange financial and legal information about the companies. Before this exchange of information, the parties may sign a letter of intent. The letter of intent may require that all information exchanged will remain confidential, and the parties agree not to entertain offers from other parties during the due diligence period. More…

The New Estate Planning

The New Estate Planning

by John McDermott
MidAm Bank

In the old days “estate planning” simply meant making a will.New needs have sparked new thinking.

Andy Ames just did some planning:He placed his securities in a living trust.If anything happens to him, his trust will grow to include the proceeds of his life insurance.The enlarged trust fund then would be invested and managed as a unified source of income for Andy’s wife and children.

Barbara Bates desires estate planning privacy.Also, there are certain relatives for whom she is not providing, so she wants to minimize the risk of challenges from disgruntled heirs.She too has built her estate plan around a Revocable Living Trust. More…