Updating Your Estate Plan: Why Knowing Your Business Value Matters

ARTICLE | July 29, 2024

Authored by Vasquez + Company

Summer provides a unique opportunity for business owners to review their estate plans, especially with family gatherings making it easier to discuss long-term goals. The article "Business Owners: Understanding Value Is Key to Updating Your Estate Plan" emphasizes the importance of knowing your business's current value to effectively plan for wealth transfer and take advantage of the current federal gift and estate tax exemption before it potentially decreases in 2026.

Key Points

• Current Valuation: Accurately knowing your business's value helps in planning and transferring wealth.
• Federal Tax Exemption: The current exemption of $13.61 million per individual is set to decrease after 2025, making it crucial to consider gifting shares now.
• Valuation Factors: IRS Revenue Ruling 59-60 outlines eight factors for valuing private business interests, including the nature of the business, financial condition, and industry outlook.
• Qualified Appraisers: Utilizing a qualified appraiser ensures good faith and accuracy in valuations for tax purposes.
• Gifting Strategies: Proactive gifting of business shares can minimize future estate tax exposure and take advantage of the current higher exemption.

For more details, read the full article here.

Our firm provides the information for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. This article is not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided “as is,” with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.