Estate planning opportunity amid depressed business values

BVWireIssue #215-4
August 26, 2020

practice management and growth
practice management, estate planning, valuation engagement, coronavirus, COVID-19

Among the key takeaways from the recent ENGAGE 2020 conference sponsored by the AICPA was one of particular interest to business valuers. “The pandemic has created some temporary financial planning opportunities,” says Steve Siegel, JD, LLM, president of The Siegel Group. “If you have a client who plans to pass their business along to a child one day—while business values are low, this is a useful time to get a new business appraisal. If you wait, values may recover, and federal tax laws may be less generous to business owners seeking to transfer their interests to family members.”

A two-part article in The Estate Planner gives a good overview of the exit planning process for closely held and family businesses. “Planning to sell a closely held business might start with a valuation three to five years before the targeted exit date,” the article says. It also cites a PwC study that found that only a quarter of these businesses have any succession or exit plans.

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