A key area of financial planning for business owners looking to strategize and plan for the sale or transition of their business is planning for their life’s milestones after the sale. Some of these milestones will involve (1) income and estate tax planning, (2) college funding for your children or grandchildren, (3) charitable planning.
Income and Estate Tax Planning:
Tax planning and creating tax efficient structures to maximize your after-tax cash will enable you to better provide for your post-sale lifestyle and the future of your family’s financial well-being. Often business owners overlook the tax consequences of the sale of the business at the state level. Depending on the size and structuring of your estate, your beneficiaries may see an unexpectedly large portion of your estate go to taxes.
College Funding for Your Children or Grandchildren:
As many business owners focus on providing for their family, planning how to finance your children or grandchildren’s education can be a key consideration for your holistic financial planning. Budgeting for the cost of tuition will give you a better understanding of the amount you will need to sell your business for in order to adequately provide for your family’s education. Additionally, engaging a professional to assist in your family’s educational planning will enable you to make smart financial decisions. For instance, funding a 529 Plan can be a tax efficient way to plan and save for future tuition expenses.
An often-overlooked element of a business owner’s financial plan is the amount they wish to allocate to charitable giving. Knowing the charitable causes that you care about and want to help fund will let you and your financial professionals project how much you will need to adequately fund your charitable endeavors.
The legal team here at Jacko Law Group, PC (“JLG”) is experienced in advising business owners through the sale and transition of their businesses. Further, JLG with their Certified Exit Planning Advisor, is able to provide support and coordination among all your professionals to ensure that you have a complete Exit Plan that seeks to maximize the value of your business upon its sale or transition and provide for the financial needs of you and your family.