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Business Client Services

Succession Planning

Protecting and Passing on Your Business.

You may be interested in protecting your business and someday passing on this important asset. However, if you fail to address inherent risks, all your time and hard work, as well as your personal and professional financial security, may be in jeopardy.

Have you taken the time to plan for the efficient transfer of your business to the individuals you have chosen upon your retirement or death? Have you carefully considered the potential estate and gift tax consequences of passing your assets on to the next generation?

Your Financial Advisor advisor, along with specialists in estate, trust, insurance and charitable planning, can help you develop a plan for protecting and transferring your business interests. As part of an integrated strategy, they'll show you ways to help you protect against potential financial losses, reduce estate and gift tax consequences, generate retirement income and transfer the management and control of your business to others.

The following are strategies that may be included in your plan:

Buy-Sell Agreements can help establish the business' value and ensure the orderly and efficient transfer of your business interests.

Key-Person Planning helps you protect your business against potential revenue loss when a key person leaves the company upon retirement, disability or death.

Sale to a "Defective" Grantor Trust can assist in transferring your business interests to a trust in a tax-efficient manner. Assets can be sold to the trust at a discounted price, and the appreciation will pass for the benefit of the trust's beneficiaries without transfer taxes.

Life Insurance can provide needed liquidity to pay estate taxes, to attract or retain talented employees or to replace the economic value of a key person. A Split Dollar Insurance Arrangement may allow your company to share the cost of life insurance with you or other employees.

Lifetime Gifts of Business Interests may be attractive if you expect your business to appreciate in value during your lifetime. If the business transfer is made during your lifetime, the appreciation on the asset after the gift is made should not be subject to estate or gift taxes.

Family Limited Partnerships or Limited Liability Companies transfer a portion of your business interests to family members at a discount to reduce the value of the gift. These entities can help you protect your family's wealth and minimize the size of your potential estate, while allowing you to retain control over your assets.

Private Foundation gifts made during your lifetime qualify for charitable gift deductions, and possibly income tax deductions, while gifts made at death qualify for charitable estate tax deductions.

Morgan Stanley Smith Barney LLC, its affiliates, and its employees are not in the business of providing tax or legal advice. These materials and any tax-related statements are not intended or written to be used, and cannot be used or relied upon, by any such taxpayer for the purpose of avoiding tax penalties. Tax-related statements, if any, may have been written in connection with the "promotion or marketing" of the transaction(s) or matters(s) addressed by these materials, to the extent allowed by applicable law. Any such taxpayer should seek advice based on the taxpayer's particular circumstances from an independent tax advisor.

Insurance products are offered through SBHU Life Agency, Inc.

For more information, please contact your Financial Advisor.

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