2. Estate Planning for Owners of Closely-Held Businesses
The Importance of Estate Planning
If you’re like most business owners, your business is your largest and most
important asset. This means that when you die it’s likely to be included in
your estate at its full market value, resulting in a sizeable federal estate tax
obligation. Without proper planning, the cash to resolve that tax liability
may not be easily obtainable from the business.
What you can do to resolve estate tax liability
If the business represents a significant portion of your estate, one option
would be to pay the estate tax, plus interest, over a number of years,
essentially borrowing from the IRS. This can be a costly way for your estate
to meet the obligation, potentially draining much needed assets from the
business you’ve passed on to your heirs.
We can introduce you to another option, one that would fund the estate tax
obligation for your heirs and make sure your business isn’t compromised
in the process. After decades of working with business owners to help them
find estate planning solutions, we’ve got the experience and expertise to help
you find the right strategy for your closely-held business.
Key Estate Planning Issues
We can supplement and enhance the assistance of other planning
advisors.
• The Phoenix Business Valuation Service can help you determine the value
of your business for estate and gift tax purposes. It’s informal, informative
and free.
• Our experts can help you estimate your final estate tax obligations and
devise strategies to provide sufficient liquidity to address them, without
severely eroding the net estate passed on to your heirs.
The insurance and investment products are:
– Not insured by FDIC, NCUSIF, or any other state or federal agency that insures deposits;
– Not a deposit or obligation of, underwritten or guaranteed by, the depository institution or any affiliate;
– Subject to investment risk, including possible loss of principal invested.
IRS Circular 230 Disclosure: Any information contained in this communication (including any attachments) is not
intended to be used, and cannot be used, to avoid penalties imposed under the U. S. Internal Revenue Code. This
communication was written to support the promotion or marketing of the transactions or matters addressed here.
Individuals should seek independent tax advice based on their own circumstances.
3. • We can show how life insurance solutions such as single life and
second-to-die life products are cost effective ways to make sure there
is sufficient liquidity to meet any estate tax liability on your estate.
• We can help you decide if a buy-sell agreement among the business
owners — or, if in a family business, among parents and children
currently active in the business — is a good way for you to obtain
necessary liquidity.
• Finally, we can help you assess your wills and other estate planning
documents to see if they take full advantage of opportunities to
minimize estate taxes — through the use of bypass trusts, leveraged
lifetime gifts, valuation discounts and other planning techniques.
How to Get Started
Phoenix has a team of professionals who can work with your advisors
to create an estate plan tailored to your specific circumstances.
Understanding all aspects of your business needs and challenges is
critically important — and your financial representative has the
experience to do just that.
• We’ll meet with you and your trusted advisors to:
– learn about your needs and what you want for your business,
– devise strategies to meet your goals, and
– develop recommendations based on those strategies.
• In appropriate cases, we’ll prepare detailed life insurance proposals
that will help you evaluate the costs and benefits of using life
insurance to meet your planning needs.
Contact your financial representative today to discuss
Business Owner Strategies.
Phoenix does not offer tax or legal advice.
