Business Succession Planning and Concentrated Stock

Why do many business owners and concentrated shareholders neglect to complete a financial plan?

Owning a small business or a large concentrated stock position in a private or public company involves strategic planning. Further, one of the biggest challenges owners face is planning their succession and/or managing the tax implications of their decisions. We will help you review available options and provide guidance on the funding of your choices.

Selling concentrated stock is complex and there are many paths to liquidate holdings that achieve favorable tax outcomes. Whether it is extending out your timing until you have less taxable income, understanding when you hit your marginal tax bracket, or transferring shares to a trust for chartable gifting, we go over all the options with our clients so they are informed and can make decisions with confidence related to their closely-held or concentrated stock positions.

Whether transitioning your business to the next generation or selling your company to an outside third-party, owners must consider the impact on income, taxes and their financial security, before agreeing to transfer ownership to a family member or completing a sale to a third party. Normally, the sale involves capital, complex contracts, promissory notes and life insurance and there are ramifications on how these transactions are structured which could impact multiple generations and family relationships. Providing guidance during these times of stress is essential to helping our clients achieve their desired outcomes.

Hightower Advisors, LLC is an SEC registered investment adviser. Securities are offered through Hightower Securities, LLC member FINRA and SIPC. Hightower Advisors, LLC or any of its affiliates do not provide tax or legal advice. This material is not intended or written to provide and should not be relied upon or used as a substitute for tax or legal advice. Information contained herein does not consider an individual’s or entity’s specific circumstances or applicable governing law, which may vary from jurisdiction to jurisdiction and be subject to change. Clients are urged to consult their tax or legal advisor for related questions.

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Hightower Advisors, LLC is a SEC registered investment adviser. Registration as an investment adviser does not imply a certain level of skill or training. Some investment professionals may also be registered with Hightower Securities, LLC and offer securities through Hightower Securities, LLC, member FINRA/SIPC. You can check the background of our firm and investment professionals on brokercheck.finra.org. Unless otherwise indicated relative to a specific award or ranking, Hightower Advisors, LLC does not pay a fee to be considered for any ranking or recognition, but may have paid to publicize rankings obtained and disseminated prior to 11.4.2022. All awards / rankings / ratings obtained and distributed on or after 11.4.2022 will be accompanied by specific disclosure as applicable.

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