Blog Post

Estate Planning for the Business Owner Series, Part 5: Estate Planning and the M&A Process

Future Wealth Navigator

Once the business owner is ready to sell the business, there will be considerable time and energy focused on that goal. The client may engage an investment banker or business broker to assist in the sale, along with dedicated legal counsel specializing in mergers and acquisitions (“M&A”) for the transaction. The business’ accountant will play an important role as will the personal financial advisers. It is possible that these roles may change from the individuals currently serving in these roles given the complexity and dollars involved, which is a natural progression during a business sale.

The business owner may be an existing client who has already done some estate planning with the business interests. In this case, the estate planner will likely need to be involved to educate the M&A counsel on the trusts that have been put into place and provide documentation to be shared during the due diligence process. The client generally does not have to share the full terms of the trust with anyone. For many states, a certificate of trust can be provided in lieu of providing the full trust, which provides key details about the trust without disclosing the dispositive provisions. The buyer’s counsel may require a legal opinion from the estate planner as to certain aspects of the trust, or the client may agree to provide a full copy of the trust as long as there are strict limitations on how it can be shared among buyer’s counsel and advisers.

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