Tax Planning Services

Succession Planning

Without the right business succession plan, you leave your family-owned or privately held business vulnerable to higher taxes, ownership disputes, loss of revenue, or worse.

A business succession plan needs to include a tax plan as it affects the value of the company, the owner’s persona wealth, and the amount of wealth that can pass to the next generation.

While the future of your company will be out of your hands, you can guarantee a certain tax outcome with the right plan in place.

The right plan will depend on a variety of factors, such as:

  • Company structure
  • Whether you plan to sell or transfer ownership
  • Whether your company has an employee stock ownership plan (ESOP)

If you’re planning to transfer ownership to family members, there are a few ways to do it, but each with different tax implications, such as transferring now, at death, or over time. For example, if your business is an S corporation, you could transfer your shares into a Grantor Retained Annuity Trust (GRAT), which allows you to control the assets until your death, receive annuity income from those shares, and transfer the remaining interest to your heirs. The GRAT would be excluded from your estate and on future incomes will be taxable to your heirs. This is just one of many types of trusts that can be employed.

Contact Morris and Associates today for a FREE consultation to discuss which succession strategy would be best for you.