Are YOU ready for a sale – emotionally and financially?

Most entrepreneurial owners have worked 7 X 24 to build their business and have an excruciating time letting go once they sell. Have you figured out what you want to accomplish in your life post sale? If you haven’t, you may not be able to complete the transaction. Have you developed scenarios concerning your tax impacts and personal financial needs? A good financial planning team with tax expertise can help you navigate your options. Taking this step early can help you optimize tax impacts.

I owe what?

  1. Tax minimization goal is to reduce total overall taxes (income and estate)
  2. Watch out for alternative minimum taxes; your effective tax rate may be higher than you think
  3. The current capital gains tax (federal) at 15% may be the lowest it will be; consider this in future planning
  4. If charitable planning is involved, need to review the strategy on a multiple year basis 
  5. Avoid tax shelters that are too good to be true (partnerships created to generate capital losses to offset gains do not work)

How much is enough?

  1. Consider financial as well as non-financial decisions
  2. Think about what to give to family and charity
  3. How to provide for your children and grandchildren without spoiling them (i.e. is it better to be born on third base or hit your own home run)?
  4. Studies show that after the 3rd generation receives the wealth it will be spent
    1. 1st generation: creates
    2. 2nd generation: invests and protects
    3. 3rd generation: spends

How do I transfer wealth? Family wealth transfer is ultimately limited to current gift and estate taxes.

  1. Lifetime exemption
  2. Estate tax
  3. Need to have flexibility with planning
        1. Balance the planning technique with current gift and estate tax credits
        2. Goal should be to maximize the effective use of gift credits during life = leverage
          1. Maximize annual gift exclusion
          2. 529 plans (up to 5 years of gifting now)
          3. Family limited partnerships (flp)
          4. Grantor retained annuity trusts (grat)
          5. Irrevocable life insurance trusts (ilit)
          6. Qualified personal residence trust (qprt)

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ABOUT THE AUTHOR. Deborah Steinthal is Founder and Managing Director of Scion Advisors, a leading boutique, strategy consulting firm serving the U.S. wine industry. With a proven approach enabling business owners to position for profitable growth or for exit, she has worked alongside over 150 winery owners and CEOs; and has moderated over 80 Winery CEO Roundtables involving more than 50 top wine industry CEOs for over a decade. Deborah’s expertise is in the area of business growth strategy, family business transformation, and board and leadership development.

Based out of McMinnville, Oregon; born in Lima, Peru; raised in Belgium and Germany; Deborah has lived, worked and travelled globally. She is broadly published in the national business press, an invited speaker, panelist and widely quoted for research on key practices, such as such as How to Build a Pull Brand, Digital Commerce and Family Business Transition.

For more information call Deborah Steinthal at 707.246.6830.

Among her clients: Cristom Vineyards, Adelsheim Vineyard, Wine by Joe, DeLille Cellars, Woodward Canyon Winery, OVS, Willakenzie, Elizabeth Chambers Cellar, Patz & Hall Winery, Benziger Family Vineyards, Calera Wine Company, Delicato Family VIneyards, Cakebread, Spottswoode, Gundlach Bundschu, Luna Vineyards, Clos Du Val, Quail’s Gate Winery, Wente, J. Lohr, Choice Lunch,
 Cowgirl Creamery, 
Easton Malloy 
(producers of Peppermint Bark for Williams-Sonoma)
, and McEvoy Ranch.

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