It takes a vision to create a legacy - Universal Insurance …€¦ · · 2015-04-06It takes a...
Transcript of It takes a vision to create a legacy - Universal Insurance …€¦ · · 2015-04-06It takes a...
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Succession planning strategies for the privately-owned business
It takes a vision to create a legacy
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Contents
1 Introduction
2 Protecting your business with a succession plan
4 Overview of the tax transfer system
7 Solutions: tax-reduction strategies
12 A case study
TwoseparatecompaniesissueLincolnlifeinsurancepolicies.NewYorkpoliciesareissuedbyLincolnLife&AnnuityCompanyofNewYork,Syracuse,NY.Forallotherstates,policiesareissuedbyTheLincolnNationalLifeInsuranceCompany,FortWayne,IN.Thesecompaniesareseparatelyresponsibleforsatisfyingtheirownfinancialandcontractualobligations.
Not a deposit
Not FDIC-insured
Not insured by any federal government agency
Not guaranteed by any bank or savings association
May go down in value
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Butmorethan90%oftheroughly23millionbusinessesintheUnitedStateshavesomeformoffamilyownership—includingapproximatelyone-thirdofthelargestpubliclytradedcompanies!¹
Yetonly30%ofthesebusinessessurviveintothesecondgeneration,andonly12%willstillbearoundbythethird.²
It takes a family to employ a nationFortune 500 companies seem to get all the media attention.
Thefateofthefamilybusiness
Why?Twoobviousreasonsarefamilyconflictandhighfederalestatetaxes.Butathirdreasonisperhapsevenmoreinfluential:failure to design a proper succession plan.
Businessownersaretypicallysobusywithday-to-daychallengesthattheyoftenhavelittletimetothinkaboutwhowilltakeoverthebusinessoncethey’regone.Buttheconsequencesofhavingnoplaninplacecouldbecatastrophictothefamily,employees,andotherswhodependuponthebusiness.Forinstance:
•Willthebusinesshavetobesoldinordertopayestatetaxes?
•Ifaco-ownerdies,willtherebeaconflictbetweenthesurvivingbusinessownersandtheco-owner’sfamily?
•Willthechildrenoftheownerwishtocontinuethebusiness?Whatiftheydon’t?
Abusinesssuccessionplaniscrucialifyouwanttopreserveyourhard-earnedbusinesslegacy,protectyourfamily,andkeepthegovernmentfromdiggingdeeperintoyourpocket.
¹www.BizStats.com,accessed2007
²JosephAstrachar,Ph.D.,editor,FamilyBusinessReview,ascitedonFamilyFirstInstitute,www.ffi.org,2007.
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It takes a succession plan to protect a business
Although 85% of family-owned
firms say their successor will be
a family member, that may not
happen without proper succession
planning.
In fact, �9% of family business
participants have not completed
any estate planning other than
writing a will.¹
¹ Facts & Perspectives on Family Business Around the World, Family Firm Institute, www.ffi.org, Nov. 2008.
Just what can a succession plan do for you?
Atitsmostbasic,asuccessionplanisadocumentedroadmapforyourpartners,heirs,andsuccessorstofollowintheeventofyourdeath,disability,orretirement.Itcanalsobeusedtoorchestratethesaleofyourbusinessandmayevenhelpestablishthevalueofyourbusiness.Itmayalsohelp:
•Establishwhowouldrunthebusinessifyouretireorpassaway.
•Setpoliciesfordistributionofbusinessstockandotherassets
•Setschedulesfordebtretirement
•Encouragekeyemployeestoremainonthejob
•Protectthebusinessshouldapartnerdecidetotakehisshareandleave
•Helppreventfamilyconflictfromforcingthesaleofthebusiness
•Helpyourheirspayestatetaxeswithoutsacrificingthebusiness
•Provideawaytotakeadvantageofunexpectedexpansionopportunities
Inaddition,havingasoundsuccessionplanmayhelpyouasyouseektosecureyourownretirement!
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How do you begin?
Establishyourobjectives
Clearlyestablishyourobjectives—whatyouwanttheplantoaccomplish.
Communicateyourplan
Communicateyourvisionwithyourfamily,businesspartners,orkeyemployees.Frankandongoingcommunicationisessential.Notonlydoesitpreventsurprisesbylettingeveryoneknowtheirrole,itcanhelptomanageconflictsthatcoulddisruptyourbusiness.Thekeyistoresolvethemearlyontopreserveyourfamilyandtheongoingsuccessofyourbusiness.
Makeaflexibleplan
Yourplanshouldbeflexible,sincebusiness,family,andhealthsituationscanchangeatanymoment.Makesurethat,regardlessofwhatmayarise,yourbusinessisstructuredtohandleunexpectedchangesandopportunities.Play“whatif”scenarioswiththosewhoareimportanttothebusiness,includingqualifiedlegalandfinancialprofessionals.
Choosing a successor
Istherereallyanyoneouttherewhocanrunyourbusinesswiththeunparalleledstyleandacumenthatyou’vebroughttoit?Well,unlessyou’retheretoshowthemhow,therewon’tbe.
Sodecidewhoisbestqualifiedandstartgroomingthatpersontoday.
Thisstepmaybeeasiersaidthandone.Youmayhaveachoiceofequallyqualifiedchildrenoremployees.Ifmorethanonechildisinvolvedinthebusiness,you’llneedtodecidewhogetstobebossandwhogetsvotingstock.
Ifnolikelycandidatescometomind,youmaywanttoexamineyourhiringandtrainingprograms,orevenyourownmanagementstyle,toseeifthey’rekeepingemployeesfrombecomingleadershipmaterial.
Thesecretistomakeyourdecisionsinawaythatwillallowyourbusinesstosurvive,youremployeestostayhappy,andideally,yourfamilytoremainatpeace.
It’sdifficultforanybusinessownertoletgo.Butgettingthenextgenerationreadytoleadisoneofthemostcriticalwaystoprotectyourcompany’sfuture.
Onceyou’vedonethat,you’rereadyforthefinancialaspect.
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It takes holistic solutions to create a solid succession plan
Thetransfertaxsystemand
businesssurvival
Here are several solutions that you
and your legal or financial advisor
may want to consider for inclusion
into your business succession plan.
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Estateandgifttaxes
TheEconomicGrowth&TaxReliefRecognitionActof2001(EGTRRA)allowsindividualstopassincreasingamountstax-freeatdeath.Thisamountwillincreaseto$3.5millionin2009.In2010,theestatetaxisscheduledtoberepealedaltogether,butitwillreturnin2011witha$1millionexemption.
Federalestatetaxtablefor2008
Netestatevalue Estatetax*
Marginalrateonexcess
$1,000,000 $0 41%
$1,250,000 $0 43%
$1,500,000 $0 45%
$2,000,000 $0 45%
$2,500,000 $225,000 45%
$3,000,000 $450,000 45%
$5,000,000 $1,350,000 45%
$10,000,000 $3,000,000 45%
$15,000,000 $5,850,000 45%
$30,000,000 $12,600,000 45%
$50,000,000 $21,600,000 45%
$100,000,000 $44,100,000 45%
Scheduledchangesintheestatetaxcredit
YearCreditequivalent Credit
Taxreduction
2008 $2,000,000 $780,800 $435,000
2009 $3,500,000 $1,455,800 $1,110,000
2010 N/A N/A REPEAL
2011 $1,000,000 $345,800 $0
Maximumcreditforlifetimegift
$1,000,000
$345,800
$0
*Estatetaxesshownhavebeenreducedbythe2008taxcreditof$780,800.
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Thetransfertaxsystem
Generallyspeaking,transfersofpropertyaretaxedbaseduponthefairmarketvalueofthepropertyatthetimeofthetransfer.Withafewexceptionsandexemptions,thelifetimetransfersarecombinedwiththoseoccurringatdeath,andaresubjectedtothegraduatedratesshowninthefederalestatetaxtableandreducedbythescheduledchangesintheestatetaxcreditchart.
Keyexceptionsinclude:
•The annual gift tax exclusion.In2008,everyindividualcantransfer,freeofgifttax,upto$12,000peryear,perdonee.Thereisnolimittothenumberofdonees.Toqualify,thegiftmustbeconsidereda“presentinterest.”Thisexclusionincreasesto$13,000in2009.
•The credit.Eachindividualisallowedanestateandgifttaxcredit.For2008,theamountcanbeupto$780,800,increasingto$1,455,800in2009.Thiscreditallowsanindividualtomaketax-freetransfersofupto$2millionatdeathfor2008and$3,500,000in2009.
•The marital deduction.Transfersbetweenspousesdonotincurtransfertaxes,aslongaseachspouseisaU.S.citizen.Theuseofthemaritaldeductiondoesnoteliminatetransfertaxationbutsimplydefersit.
•The charitable deduction.Techniquesareavailabletocombinethetaxadvantagesofcharitablegivingwiththenaturaldesiretoprovideforfamilymembers.
•Life insurance.Ifapersongivesawayalifeinsurancepolicyonhisorherlife,theymustliveforthreeyearsafterthetransfer.Otherwise,thepolicy’sentiredeathbenefitisincludedinthedonor,orinsured’sgrossestate.
Generation-skippingtax
Thetransfertaxsystemimposesataxonassetsateachgeneration,suchasthosepassingfromparenttochild.
Thegeneration-skippingtaxhitsthosetransactionsthataredesignedtoskipageneration.Forexample,agrandparentisentitledtoanexemptionfromthistaxofupto$2millionin2008and$3,500,000in2009.Thisexemptionamountmatchestheestatetaxexemption.
However,thetaxrulesforthesetransactionsarecomplex.Poorplanningcancausetheamountofthetaxtoexceedthevalueoftheassetthatwastransferred!
Businessvaluation
ThevastmajorityofIRSchallengesfocusondisputingataxpayer’svaluationofthebusinessassets.1TheIRSmaybelievethatyourbusinessvalueishigherthanyouanticipated.You,ontheotherhand,wanttohavethevaluelowertoreduceestatetaxes.
IftheIRSwins,yourfutureheirscouldbeforcedtosellalloraportionofyourbusinessinordertomeettheirtaxobligations.Youmaybeabletopreventorreducethepotentialfordisputebyincludingabonafidebusinessvaluationinyoursuccessionplan.
“Fairmarketvalue”isusuallydefinedastheamountawillingbuyerwouldpaytoawillingsellerwithneitherbeingunderanycompulsiontoconcludethetransaction.Aqualified,independentappraisercanbeavaluableally,bothtohelpyousetvalueandworkwithyoushouldadisputearisewiththeIRS.
Oncethefairmarketvalueofyourbusinesshasbeenestablished,twodiscountingmethodsmaybeapplicableduringownershiptransfer.Thesediscountsmayhelplowerthebusinessvaluationatthetimeoftransferandreducetaxesintheprocess.Theuseofeitherorbothofthesemethodswilldependuponthespecificsituation:
•Lack of marketability discount.Whenabuyerorsuccessorcannotbeexpectedtopaythefullmarketvalueofyoursharesduetothelackofareadilyaccessiblemarketforafuturesaleofthoseshares.
•Minority discount. Shareholderswithlessthan50%ownershiplackmajoritycontrol.Thiscouldlowerthevalueofthesharestoyourfutureheirsoranoutsidebuyer,whichcouldreducetheassetvaluesubjecttotransfertaxes.
1“BusinessValuationastheQuarterback,”ErinHollis,IPA’sBusinessToday,InternationalProfitAssociates,Mar.2006.
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Some tax-reduction strategies
These brief descriptions are meant
to provide you with an overview
of potential business succession
strategies. Naturally, they cannot
offer you sufficient information
for you to make a choice. Consult
a qualified business succession
professional to determine which,
if any, of these strategies could be
right for you.
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Buy-sellagreements
Thesearecontractsbetweentwoormorebusinessowners,whichoutlinethetermsofownershiptransferifanownerretires,becomesdisabled,ordies.Theyaremostoftenstructuredasentityredemption,cross-purchase,or“waitandsee”agreements.
Oneofthemajorproblemswithallbuy-sellarrangementsisfindingthefundsforeithertheownersorthebusinesstobuythedeceasedowner’sbusinessinterest.Lifeinsurancecanoftenbethesourceforthesefunds.
Entityredemption
Thistypeofbuy-sellagreementoccurswhenthebusinessbuysbackanequityinterestfromabusinessowneroradeceasedbusinessowner’sestate.Typically,theestatereceivescashinexchangefortheequityinterest.
Crosspurchase
Thistypeofbuy-sellagreementcallsfortheremainingbusinessowner(s)tobuytheequityinterestofthedepartingordeceasedbusinessowner.Tofundsuchaplan,ownerstypicallybuylifeinsurancepoliciesoneachother.Thesurvivingbusinessowner(nottheentity)purchasestheequityinterestfromthedecedent’sestate.
“WaitandSee”
Thisisahybridbuy-sellstrategydesignedtoprovideflexibilityattheexactmomentit’sneeded,thedeathofthebusinessowner.
Thebusinessentitygetsthefirstoptiontobuythedecedent’sbusinessinterest.Ifanequityredemptionplanseemsbest,thatistheoptionthebusinesswillchoose,andtheestatewillbeobligatedtosellunderabindingagreement.
Ifacrosspurchaseappearspreferable,thebusinesswillallowitsoptiontolapse.Thesurvivingowner(s)willthenhavetheoptiontopurchasethebusinessinterest.
Ifneitheroptionischosen,thebusinessentitywouldberequiredtopurchaseanyremainingbusinessinterest.Thisguaranteesthatthefullvalueofthebusinessisreceivedbythedecedent’sfamily.
Provisionsshouldaddressthefollowingastriggeringevents:death,disability,divorce,bankruptcy,and,inaprofessionalcorporation,lossofaprofessionallicense.
Oneofthemajorproblemswithbuy-sellarrangementsisthesourceoffundsforeitherthebusinessownersorthebusinessentitytobuythebusinessinterestfromthedeceasedowner.Lifeinsuranceisthetypicalsourceofthesefunds.
Theinsurancedeathbenefitsmustbereviewedperiodicallytodetermineifadditionalinsuranceisneededasthevalueofthebusinessincreases.
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Giftsofbusinessinterest
Makingalifetimegiftisoftenthemosteffectivewaytoreduceestatetaxation.Dependingoneconomicability,youmaybemoreorlesswillingtomakeasignificantlifetimetransferofwealth.Bymodelingtheassetbaseandcashflowrequirementsbeforemakingthesegifts,youmaydiscoverwhetherornotyoucanaffordtogiveupcontroloftheassets.
Giftscanbemadeoutrightorintrusts.Thebenefitsinclude:
•Shiftinganasset’sincomeandgrowthoutofahigherincometaxbracket
•Shiftingoutofahighestatetaxbracket
•Gainingtaxleverage(Eventhoughestateandgifttaxratesarethesame,thewaythey’recalculatedfavorslifetimetransfers,asshowninthetaxtransfersystemchart.)
•Allowsa“testingground”forfuturemanagementskills.
Thetaxtransfersystem
Comparisonofgiftandestatetaxes
Total value of asset available: $6,000,000
Gifttax*
Tax base:netvalueofassetstransferred $4,000,000
Gift tax:taxratextaxbase $2,000,000
Net transfer to donee:totalassets–tax $4,000,000
Estatetax*
Tax base:totalvalueofassetsavailable $6,000,000
Estate tax:taxratextaxbase $3,000,000
Net transfer to heirs:totalassets–tax $3,000,000
Lifeinsurance
Theuseoflifeinsurancemaybeapracticalplanningtool.Thisisbecausepremiumsarepricedrelativetopolicyproceeds.
Foramarriedcouple,itiscommontousesecond-to-diecoveragetohandleestateliquidityneeds.However,ifthepersonwhoisinsuredownsthepolicy,theproceedsaresubjecttoestatetax.Therefore,lifeinsuranceshouldbeownedoutsideoftheestateinordertoavoidinclusionoftheproceedsandcorrespondingtaxes.Onestrategyistoplacelifeinsuranceinanirrevocabletrustorinownershipbyadultchildren.
Lifeinsuranceisalsotypicallyusedtofundbuy-sellagreements.Inanentityredemption,theentityownsapolicyonthelifeofeachowner.Inacrosspurchase,eachownerownsapolicyonthelifeofeachoftheotherbusinessowners.
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*Assumegift/estatetaxrateof50%.Highestmarginalratein2007–2009is45%.
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Privateannuities
Aprivateannuitymaybeusedinfamilysituations,whereaparentwantstotransferanasset,suchasabusinessinterest,tothenextgenerationfreeofestatetaxes.
Typically,theparentsellstheassettothechild.Inreturn,thechildpromisestopaytheparentanincomeforlife.Thisisalegallyenforceablecontractright,butit’sunsecured.Sincethepaymentstotheparentterminateatdeath,theannuitygenerallyhasnovalueandthereforeisnotincludedintheparent’sestate.
Tobesuccessful,thepresentvalueoftheannuitypaymentshastobeequaltothefairmarketvalueoftheassetbeingsold.Thechildtakestheriskthattheparentwilllivebeyondlifeexpectancy.Andtheparenttakestheriskthatthechildwillnotmeetthecurrentpaymentschedule.Forexample,atage65,theparenthasalifeexpectancyofapproximately20years.Assumingafederaldiscountrateof4%,theannualannuitygeneratedbypropertyworth$100,000is$8,688.Itshouldbenotedthatincometaxesmaybedueattheinceptionofthetransaction.
Self-cancellinginstallmentnotes(SCIN)
ASCINis,likeaprivateannuity,aninstallmentpurchaseofabusinessusuallybytheowner’schild.Unlikeaprivateannuity,however,thetermsofaSCINshouldbeshorterthantheparent’sactuariallifeexpectancy.TheSCINiscancelled,andnofurtherpaymentsaredue,ifthesellerdiesbeforepaymentsarecompleted.TheSCINinstallmentpaymentincludesahigherinterestrateasa“riskpremium.”Generally,nothingwillbeincludedintheseller’sgrossestate,butanydeferredgainontheinstallmentobligationwillbereportedforincometaxpurposes.
Familypartnerships/LimitedLiabilityCompanies(LLCs)
Afamilypartnership/LLCcanhelpshiftboththeincometaxburdenandassetappreciationfromparentstochildrenorotherfamilymembers.However,thebenefitofshiftingincometochildrenyoungerthanage18islimited,becausesuchincomewillgenerallybetaxedattheparents’incometaxrate.
Itisalsopossibletotransferbusinessintereststochildrenandretaincontrolbymaintainingthegeneralpartnership/LLCinterest.Additionally,itispossibletoreceiveadiscountforgifttaxvaluationpurposesifthetransferredpartnership/LLCinterestisaminorityinterest.Discountscanalsoapplyduetothelackofmarketabilityofpartnerships/LLCs.Anyappreciationontransferredinterestshouldnotbeincludedinthetransferor’sestate,assumingavalidpartnership/LLChasbeenestablished.
Managementcontrol
Abusinessownermaywishtogive,bequeath,orselltheequityinabusinesstofamilymemberseventhoughtheownerisnotconfidentthatthenewownerwillbecompetenttorunthebusiness.Thereareanumberofwaystomanagethissituation.
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Votingagreements
Thisisoneoftheeasiestandleastexpensivetechniques.Thissimplecontractcancreateavotingblocksufficienttoelectdirectorsanddealwithanyothermattersthatareputtoabusinessownervote.Thecontractshouldbespecificastothescopeanddurationofthevotingagreement.
Proxies
Aproxyisawrittenauthoritygivenbyabusinessownertoanotherindividual,allowingthatpersontovoteonownermatters.Themostcommonuseforaproxyistoallowownerstovote,evenwhentheycannotattendthemeeting.Itsscopedoesnothavetobethislimited.
Votingtrusts
Partiestoavotingtrustagreementsurrendertheirbusinessinteresttotrustees,whorepresentthepartiestothetrustandvotethebusinessinterest.Avotingtrustagreementisgenerallymoredifficulttobreakthanasimplevotingagreement.
Often,businessownersreceiveatrustcertificateasevidenceoftheirbeneficialownershipofthebusinessheldbythetrust.
Votingtrustsmaybedesignedtogivetrusteesfulldiscretiononvotingthebusinessinterest,ortheymaybemorerestrictive.
Beadvisedthatthevalueofthebusinessinterestwillbeincludedinthegrantor’sestateifabusinessownertransfersownershipintoatrustbutretainstherighttovotetheirbusinessinterestforlife.
Publicofferings
Iftherearenofamilymemberstocarryonasuccessfulprivatelyheldbusiness,oneoptionthatcouldhelpcontinuethebusinessisto“gopublic.”
TheSecuritiesActof1933generallyrequiresregistrationofofferingsandsalesmadeininterstatecommerce.
Fullregistrationcanbeanexpensiveprocess.Becauseofthis,boththeadvantagesanddisadvantagesshouldbecarefullyconsidered.
Advantages
•Continuedmanagementofthebusinessintheeventofthefounder’sdeathordisability
•Creationofareadymarketforbusinessinterests,allowingtheownertorealizecash,diversifyinvestments,andexpandthebusiness
•Thecreationofareadymarketattheowner’sdeath,sotheestatecansellitsinterestifliquidityorestatesettlementneedsarise
•Theabilitytoutilizestockincentivestoattractandretaintalent
Disadvantages
•Closerscrutinyofthebusiness(ReportsmustbemadetoownersandtheSECdisclosingthebusinessoperations,financialcondition,andcompensationplans.Thisinformationwillalsobeavailabletothepublic,competitors,suppliers,customers,employees,andfinancialanalysts.)
•Thepotentialinabilitytoreactquicklyinsituationsrequiringownerorboardapproval
•Thecostofinitialregistrationandcontinuingcompliance,aswellasthecostofboardofdirectorandownermeetings,proxysolicitations,andinvestorandfinancialcommunityrelations
Yourfinancialorlegaladvisormayalsobeabletoreviewalternativestofullregistration,whichwouldrequireaseparatebalancingofcostsandbenefits.
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Casestudy
Situation
Twobrothers,50-year-oldDanand45-year-oldBrad,co-foundedanelectronicsupplybusinesswiththreelocations.Bothmenaremarriedwithwiveswhoworkinthecompany,andeachbrotherhasasonwhoworksforthebusiness.
Dan’ssonisolderthanBrad’sandhasbeenworkingfull-timeforthebusinessforanumberofyears.Danalsohasadaughterwhoisnotemployedbythebusiness.Brad’ssonisfinishinghighschoolandworkspart-time.
Dan’snetworthis$3.5million,whileBrad’sis$3million.Almostallofeachfamily’sassetsareownedinthebrothers’names,witheachwifeowningonlyasmallpercentageoftheassets(10%–20%each).Danrecentlyfinishedupdatingestateplanningdocuments,butBrad’sdocumentswereoutofdateandexposedtoestatetaxes.
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Concerns
•Thecurrentbuy-sellagreementisfundedwithlifeinsurance,butmandatesthatthedeceasedbusinessowner’sfamilybeboughtoutwiththeinsuranceproceeds.
•Underthecurrentdesign,thedeceased’sfamilyismadetorelinquishemotionalandfinancialinterestinthebusinessthedeceasedworkedsohardtobuild.
•Sincethebusiness,underpresentcircumstances,isasuccessfulconcern,thisgivesthedeceasedbrother’sfamilynorighttoshareinfutureappreciationofassets.
•Additionally,sincespousesandsonsarealsoemployeesofthebusiness,theycouldeachpotentiallyloseallmanagementpowerbestowedbyvotingrights,andinthecaseofonebrotherpredeceasingtheother,themembersofthedeceasedbrother’sfamilycouldpotentiallyfacejoblossifrelationsbecomeacrimonious.
•Allpersonallifeinsuranceisownedintheestateofeachinsured,whilethebuy-sellcoverageiscross-owned(i.e.,eachbrotherownstheother’spolicy).AsimultaneousdeathofDanandhiswifewouldtriggerestatetaxesjustduetoimproperinsuranceownership.
Potential solutions
•First,determinewhatthefamiliesreallywanttohappenwiththebusinessintheeventthatonepartnerpredeceasestheother.WewerecognizantofthefactthatDanisfiveyearsolderthanBrad,andwouldlikelypassawayorretirebeforehisbrother.
•Basedontheaboveintrospectivediscussion,itwasdeterminedthatthefamiliesdidn’twanttobeforcedoutofthebusinessandmightbeneededtoensurebusinesscontinuityduringpotentiallydifficulttimes.Therefore,themandatorybuy-sellwasfelttobeunnecessary.
•Moveallpersonalinsuranceownershipoutofthetaxableestateofeachfamilymember(spousesincluded).
•Beginretitlinghomesandotherassetsintothespouses’namestoutilizeUnifiedCredits.
•Transferthebuy-sellinsurancetoanirrevocabletrust,sothattheproceedswouldbekeptforthebenefitofthedeceasedbrother’sfamily.Thiswouldallowretentionofthestockandensurestrongfinancialbackingforsaidfamily.
•Astockgiftingstrategywasthenrecommendedasameanstoreducethetaxableestateofthebrotherswhilealsorewardingthesonswhoparticipatedinthebusiness.
•UpdateBrad’sestateplanningdocumentstoreflectthenewbusinesstransferstrategyandcoordinatewithvarioustrusts.
•Thebrothers’estateplandocumentswereupdatedtoreflecttheircurrentneeds.Inaddition,theywereabletoprotecttheirfamilies’ownershipinthebusiness,reducetheirpotentialtaxburden,andhelpensurebusinesscontinuity.
Yourbusinesssuccessionplanistooimportanttoleavetochance.Contactyouradvisortodiscoverhowtoprotectyourbusinesstodayandinthefuture.
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A tradition of integrityAtLincolnFinancialGroup,wehavea100-yearheritageofhelpingpeoplefindsolutionstotheirfinancialchallenges—withthesamehonesty,integrity,andresponsibilitythatyou’dexpectfromournamesake.It’salegacythatweproudlyandrespectfullycontinueeachday.Webelieveourcontinuedcommitmenttostrengthandstabilityisindispensabletowhoweareandcriticaltoyourconfidenceinus.Weprideourselvesonbeingabletoidentifyanddeliversophisticatedfinancialstrategiesandproductsolutionsforthecreation,protection,andenjoymentofwealth.Wearecommittedtohelpingclientsredefinetheirretirementbecausewedon’tbelieveretirementisanend—it’sanopportunityforeveryonetostartdoingwhattheyweremeantforallalong.
Importantdisclosures.Pleaseread.LifeinsuranceproductsareissuedbyTheLincolnNationalLifeInsuranceCompany,FortWayne,IN.The Lincoln National Life Insurance Company does not solicit business in the state of New York, nor is it authorized to do so. Contractual obligations are backed by the claims-paying ability of The Lincoln National Life Insurance Company.
InsuranceproductssoldinNewYorkareissuedbyLincolnLife&AnnuityCompanyofNewYork,Syracuse,NY.Contractual obligations are backed by the claims-paying ability of Lincoln Life & Annuity Company of New York.
Productsandfeaturesaresubjecttostateavailability.Limitationsandexclusionsmayapply.
This material was prepared to support the promotion and marketing of insurance product. Lincoln Financial Group® affiliates, their distributors, and their respective employees, representatives, and/or insurance agents do not provide tax, accounting, or legal advice. Any tax statements contained herein were not intended or written to be used, and cannot be used for the purpose of avoiding U.S. federal, state, or local tax penalties. Please consult your own independent advisor as to any tax, accounting, or legal statements made herein.
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Not insured by any federal government agency
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May go down in value
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www.LincolnFinancial.com
LincolnFinancialDistributors,Inc.,abroker/dealer,isthewholesaledistributionorganizationofLincolnFinancialGroup.LincolnFinancialGroupisthemarketingnameforLincolnNationalCorporationanditsaffiliates.
Affiliatesareseparatelyresponsibleforsatisfyingtheirownfinancialandcontractualobligations.
LCN0811-2023280LIF-GEN-08-0825LIF-BRC021_Z01POD 12/08 Z01Order code: LIF-BRC021