Estate and Succession Planning for Alarm Company Owners
A couple topics that most people do not want to think about are death and taxes. However, for alarm company owners who are considering eventually transferring the business to children or other family members, the subjects are very important.
There is good news and not so good news. The good news is that you likely have until Dec. 31 to consummate your plan. The bad news is unless the law changes, the window of opportunity to avoid significant taxes may be closed; when it will open again is anyone’s guess. So, I have listed a few points on why you may need to act this year.
Currently, the top gift and estate tax rates are each 35%. There’s also a unified gift and estate tax exemption of $5.12 million ($10.24 million for married couples). You can transfer up to the exemption amount – through either lifetime gifts or bequests at death – tax-free. Unless Congress passes new legislation, however, in 2013, the exemption will drop to $1 million ($2 million for married couples) and the top gift and estate tax rate will jump to 55%. You can wait until December to see if the law will be changing, but you should be ready.
Succession planning is something most people don’t want to think about. However, planning can permit a transfer of a business of up to $10.24 million dollars, and you don’t have to use all of the credit if the business isn’t worth that much (visit whatsmyalarmcompanyworth.com to find out what your alarm company is worth). Making the transfer after Jan. 1, 2013, either voluntarily or because of death, could have significant tax consequences. With the use of trusts and other estate planning devices, the transition can be less painful.
Kirschenbaum & Kirschenbaum has established the Security Industry Acquisition Group (SIAG) and can assist you with your succession plan and estate planning as well. To reach our SIAG attorneys, contact Jennifer Kirschenbaum, Esq. at 516 747 6700 ext. 302 or Dennis Stern, Esq. at (516) 747-6700, ext. 323.
Ask about sale of the business, transfer of ownership to family, trust Agreements and other corporate and estate planning issues.
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