Succession planning has always been an integral part of estate and retirement planning. For many business owners, especially those in closely held businesses, preparation for succession or the sale of their business is crucial for the owners’ financial future. In light of the global pandemic, we have a situation that’s changing the face of “normal” succession planning. This is also quite relevant to estate planning. If an individual is contemplating a near-term liquidation of a business interest, that may impact the type of estate planning that may be warranted. If an individual lives in a high tax state, consideration of transferring interests to a non-grantor trust in a no-tax state may also be warranted.
This Time Is Different
Although many business owners have weathered difficult times in the past, and perhaps rebuilt their businesses through several recessions, the current situation feels different. Some business owners experienced very bleak times following 9/11 and were able to recover. They survived the financial meltdown in 2008–2009. Now COVID-19. Business owners face a larger dilemma, which has many contemplating whether it is time to do something different.