Tag

succession

2 insights

A two-point comparison of what it costs to raise $6.1 million against a $30 million family manufacturer. Selling a 31 percent stake under a deadline gives up $9.38 million of business value. Financing the same amount over five years costs $1.68 million of interest.

The Estate Tax Is Due in Nine Months. The Estate Is the Business.

A family owes $7.6 million of estate tax nine months after the founder's death, with $1.5 million of cash and a $30 million manufacturer. Selling a stake under the deadline gives up $9.4 million of value. Financing costs $1.68 million.
Financing StrategyBorrower Advisory
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A grid of five buy-sell triggers against two insurance funding sources, showing that life insurance produces cash only on death, disability buyout cover only on disability and only if it was bought, and that retirement, voluntary exit and divorce produce no automatic funding at all.

The Buy-Sell Priced the Shares. It Did Not Fund Them.

A buy-sell agreement settles who can trigger a sale and exactly what the shares are worth. It usually settles funding in one sentence naming life insurance, which pays on only one of the five events that can fire it.
Financing StrategyBorrower Advisory
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