Start with a buy-sell that is actually funded
A buy-sell agreement is only as good as the funding behind it.
Estate Planning for Business OwnersLegacy Counsel
Estate Planning for Business Owners
For most business owners, the operating company is 60–90% of the estate, illiquid, and impossible to divide cleanly among heirs.
Key Points
- ◆Buy-sell agreements with funded valuation mechanisms
- ◆Voting / non-voting recapitalization to enable gifting with retained control
- ◆Grantor trusts (IDGTs, GRATs, SLATs) to move appreciation outside the estate
- ◆Valuation discounts on minority and non-marketable interests
- ◆Coordination with key-person insurance and management succession
Move appreciation out of the estate before exit
If the business is likely to appreciate before sale, the cheapest moment to transfer equity is right now — at today's lower valuation, using today's gift exemption, with future growth accruing outside the estate.
Coordinate with management succession
Ownership succession (who owns it) and management succession (who runs it) are different problems.
Frequently Asked
Do I need a buy-sell agreement if I am the only owner?+
Not for the buy-sell purpose, but you do need a succession plan: who has signing authority on day one after your death, who values the company, who runs it during transition, and who buys it.
What is a GRAT and when does it make sense?+
A grantor retained annuity trust transfers an asset to a trust in exchange for fixed annuity payments back to you.
How early should I plan before an exit?+
Ideally 18–36 months before a likely transaction.
Next Step
Talk to Legacy Counsel.
Fixed-fee estate planning for clients in New York, New Jersey, and Ohio.
Drew Jacobs is licensed in New York, New Jersey, and Ohio. Nothing on this page constitutes legal advice or an offer to represent you in a jurisdiction in which we are not licensed.
Prospective Client Disclaimer. Submitting this form does not create an attorney-client relationship. Do not send confidential or time-sensitive information until we have signed an engagement letter. We will review your submission and follow up to discuss whether we can represent you. By submitting, you consent to be contacted about your inquiry.