Selling the Business

Paul & Samantha

CASE STUDY #4

AGE:

55 & 54

PRIMARY GOAL:

Transition business to son, protect family assets, minimize taxation and optimize their estate.

After 30 years of running a successful second generation autobody shop in Regina, Paul & Samantha have decided it is time to hand over the reins to their son, Jake.

They want to receive fair market value for their business and at the same time want to be sure Jake won't be burdened with monthly debt repayments.

It is important to them to have a sustainable stream of income from their business sale that will fund their life style needs.  As a retirement gift to themselves, they plan on touring Europe for three months!

THE CHALLENGE

Paul & Samantha currently have an operating company and a holding company and aren't sure if they will qualify for the Life Time Capital Gains Exemption (LCGE).

 

They want to be sure the decisions they make today are structured properly to meet their goals.  They currently work with an investment only advisor and think they may be missing out on some significant planning opportunities.

Paul & Samantha had more questions than answers:

  • How should our corporate assets be structured to benefit from the LCGE?

  • How should we invest the buyout received in our corporation?

  • What are the tax implications of transitioning the business to our son?

  • We don't want to leave CRA a tip, are there any estate tax minimization strategies we should consider?

  • How do we create an income stream from our business sale?

 

They knew it was time to assemble a team of advisors to help them with this monumental life transition.

THE APPROACH

The first step was for Paul & Samantha to interview a few Certified Financial Planners to find a good fit.  It was important to them their new Financial Planner worked well with their lifelong CPA professional.

Putting together a team of professionals can be a long process, but they understood the importance of getting things done right the first time.

Once their goals were clearly documented, a personalized succession & retirement plan that aligned with their values and priorities could be created.

THE RESULT

In collaboration with their trusted CPA,  Paul & Samantha were able to:

  • Develop a plan all of their trusted advisors could agree upon

  • Restructure their corporate assets to qualify for the Life Time Capital Gains Exemption

  • Organize their assets both personally and corporately to generate a retirement income

  • Minimize estate tax through alternative investment classes

  • Create a succession plan to transfer assets to son by "Freezing" their corporate shares

With a plan in place, Paul & Samantha felt comfortable transitioning the business and were ready to enjoy their European adventure!

Note: The above case study is hypothetical and does not involve an actual IG Private Wealth client. No portion of the content should be construed by a client or prospective client as a guarantee that he/she will experience the same or certain level of results or satisfaction if IG Private Wealth is engaged to provide investment advisory services.

Considering selling the business?

Step #1: Schedule 15-Minute Phone Call