Business Succession Planning

Proactive business and succession planning is critical to the long-term survival of privately held and family owned companies. Jostock & Jostock, P.C. counsels clients in all aspects of business preservation and succession planning assuring ongoing viability of their business and preserving value for their beneficiaries. These services include:

Buy-Sell Agreements: We work with clients to develop buy-sell agreements that enable family members and others who are actively engaged in the business to acquire the interests of other family members or shareholders who desire to liquidate their business interests. We represent clients throughout the negotiation process. We create effective exit strategies, minimize the likelihood of shareholder and/or valuation disputes, and assist in balancing tax, business and other financial considerations with existing and future shareholders.

S-Corporations: S-corporation elections offer various tax advantages to owners of privately held businesses; however, the selection can also present unique challenges when transferring the ownership of business interests. We work with clients to develop appropriate provisions for the retention or disposition of their S-corporation stock and assure compliance with the complex tax rules that govern ownership and taxation for the S election.

FLPs and LLCs: Family limited partnerships (FLPs) and limited liability companies (LLCs) may be used for a wide variety of estate and business planning goals, including but not limited to asset preservation, gift facilitation and shifting income and assets to other family members. It enables clients to make gifts and transfer assets at lower valuation in order to minimize income and transfer taxes. Given the complex tax issues surrounding these legal structures, FLPs and LLCs require careful analysis to determine if they are appropriate strategies for a client’s situation. Our firm regularly assists in the formation of these entities by counseling clients on appropriate procedures and operations of the entities, prepare required filings and handle routine administration of FLPs and LLCs.

Valuation Issues: Valuations of business interests can have a significant effect on the value of transfer taxes that may be assessed upon transferring the assets during lifetime or at death. Valuation considerations also pay an essential role in determining the magnitude of distributions from the business and assessing the value of business interests for purposes of sale or lifetime gifting. We work closely with business-valuation experts to ensure that clients’ business interests are properly valued and represent clients before the Internal Revenue Service, as necessary.

Business Succession Strategies: Transferring family business ownership from one generation to the next presents unique succession and taxation issues that requires careful restructuring during lifetime and the implementation of proper transfer mechanisms upon death. We frequently counsel clients regarding the succession of their business utilizing strategies that efficiently transfer ownership and control such as:

  • grantor retained trusts;
  • buy-sell and shareholder agreements;
  • installment notes and self-canceling installment notes;
  • sales to grantor trusts; and
  • private annuities.
  1. Please feel free to contact us with any questions, comments or if you would like to set up a consultation