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Estate Planning

Last summer we published a Deal Note® titled “Closing Day Proceeds”, in which we provided our recommendations relating to the short-term investment of closing day proceeds and we noted that in a future Deal Note®, we would provide recommendations regarding estate planning, as related to the sale of a middle market aerospace and defense company. Today’s Deal Note® addresses this issue.

Estate planning can be extremely complex because it usually combines numerous sets of important, and sometimes conflicting, objectives, such as: i) controlling how wealth is transferred to children and grandchildren, ii) minimizing federal and state taxes, iii) achieving philanthropic goals, and iv) others. While we often advise our clients to plan well in advance for most matters relating to selling their companies, estate planning usually requires substantial lead time. Not only should your estate plan be given the appropriate time and consideration from a personal perspective, but from a tax perspective, many of the most beneficial elections need to be done years in advance of a sale.

While planning in advance is always important in M&A, estate planning by the owners should be done years in advance, to achieve the greatest benefits. If you are considering the possibility of selling in the next five years, then we encourage you to meet with your estate planning advisors soon, so as to understand your options and take important actions now.

Have a great day.

Bill Alderman