SPARDATA is an expert appraiser of privately-owned companies and professional practices. Since 1990 we have written over 27,000 business valuations. We specialize in firms with sales between $1 million and $40 million. Initial business valuations cost $6,000. Typical delivery time is 6-8 weeks but "rush" orders are completed in just 3 weeks (extra charge applies).

Estate Planning For Business Owners

What will happen to your business if something happens to you? Few people have more estate planning issues to deal with than the business owner - and poor planning is the reason why less than 30% of all businesses survive the original owner. You need to plan well today to ensure your business carries on after you are no longer there. Here are some key questions you must answer:

Who Will Manage the Business If You Leave ? Decide now so you can prepare your successor.
Who Will Own It ? You may want to sell it to family members, or to an outsider. Either way it is best to resolve issues like this now to avoid future disagreements.
How Will the IRS Value Your Company ? It is hard for owners to know what their companies are worth since their stocks are not publicly traded. Studies have shown most owner over estimate or under estimate their businesses by 50% or more! The final value placed on the business for estate tax purposes is often determined by a long and tedious battle with the IRS.

Only you can answer the first two questions. The answer to the third question - what is your business worth - requires the help of a good business appraiser like SPARDATA. It is crucial to have a recent appraisal, and make sure you have arranged for enough liquidity, usually through life insurance, to help your heirs pay estate taxes and provide ongoing income.

More generally, as a business owner seeking to eliminate estate taxes your should focus on getting valuable assets out of your estate for tax purposes, and limiting the appreciation of those assets that remain. Your business may be your most valuable asset, so if you think it is likely to grow in value going forward, consider gifting or selling shares. By giving away the stock you will keep the future appreciation out of your taxable estate. Family limited partnerships have become very popular tools to remove assets from your estate while allowing you to retain control. Consult with your advisor for details.

Certain options exist even after you pass away. Congress recognized that the obligation to pay estate taxes may force the sale of a business if the owner dies, so they created two types of relief for business owners worth considering. If either sound interesting, ask your financial advisor for details:

Section 303 Stock Redemptions . Your company can (under certain circumstances) buy back a portion of stock from your estate without having the proceeds being taxed.
Estate Tax Deferral . Normally, your estate taxes are due within nine months of your death. However, if your business represents more than 35% of your adjusted gross estate, the estate may qualify for a deferral of tax payments.

Let us send you SPARDATA's award-winning valuation guide 'What Is Your Company Worth', absolutely free! The booklet contains everything you need to know about getting your business appraised - including pitfalls to avoid, handy checklists and more. Fill in the form below to order your copy now!

Anyone thinking seriously about getting a business valuation has questions including “what will it cost?”, “how long will it take?”, “how would you value MY business?” and many others.

SPARDATA has the answers you need, and we will share them with you in a free, informative telephone conference. Click here to learn what happens during a teleconference. To get answers right away call 800-895-4100 and ask to speak with one of our Valuation Consultants.

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