Chayet & Danzo, LLC Chayet & Danzo, LLC
Call for a Free Initial Consultation
Direct 303-872-5980
Toll-Free 888-472-1088
Email Us
Compassion, talent and dedication: guiding colorado families and Their Trusted Advisors During Times of Need

Annual gifts: One part of a Colorado business succession strategy

Lifetime gifts can play an important role in estate planning. In 2015, the federal gift tax exclusion remained at $14,000 per donee. A couple with three children could give each child up to $28,000 in 2015 without tax consequences.

Only about one-third of family-owned companies survive a transition between generations. In a past article on the basics of Colorado business succession planning, we offered general ideas designed to smooth the transition. Annuals gifts can be part of a tax planning strategy.

How can annual gifts play a role in business succession?

Assume a young couple, John and Ellen, have spent decades perfecting recipes and building a following for an artisan sausage business in Denver. It started as something new, but then became a fixture over the years and the three children grew up working in the business.

Succession planning needs to answer basic questions. Do the children want to be involved in the business? How and when should a transfer or sale of the business occur?

If the children are interested in running the business, lifetime gifts may facilitate a transfer. The federal estate tax exemption is $5.43 million in 2015. If each of the siblings received equal shares valued at $3.5 million when the last parent died, a portion could be taxed as a rate up to 40 percent. However, if the parents were able to make annual lifetime gifts of $28,000 in shares to each child it would reduce the tax owed on the remainder of the gift.

Long term gifting programs can be appealing based on your circumstances. As the example illustrates, these approaches need to be carefully considered and require advance planning. The advice we offered to close the article is worth repeating. Speak with a Colorado estate planning attorney for personalized guidance in creating a business succession plan.

No Comments

Leave a comment
Comment Information

Watch Our Firm Video

We are the premier Elder Law firm in the Colorado region. We set ourselves apart from other law firms in the area with our talent, dedication, compassion and ability of our attorneys to handle any case in Elder Law. We serve Colorado families with experience and dignity in your time of need.

View More Videos

Denver Office
650 S.Cherry St., Suite 710
Denver, CO 80246

Toll Free: 1-888-472-1088
Phone: 303-872-5980
Fax: 303-355-8501
Denver Law Office Map

Edwards Office
105 Edwards Village Blvd.
Edwards, CO 81632

Toll Free: 888-472-1088
Toll Free: 1-888-472-1088
Fax: 303-355-8501
Edwards Law Office Map

Aspen Office
600 East Hopkins Avenue
Suite 301
Aspen, CO 81611

Toll Free: 888-472-1088
Toll Free: 1-888-472-1088
Fax: 303-355-8501
Aspen Law Office Map

  • Rated by Super Lawyers Macro Chayet
  • Rated by Super Lawyers Frank J. Danzo, III
  • Member National Academy of Elder Law Attorneys, Inc. TM
  • Avvo Rating 10.0 Superb Top Attorney Elder Law
  • 2015 Five Star Professional Wealth Manager Multi-Year Winner
  • Our new 2015 Medicaid Book: how to protect your Family's Assets from devastating nursing home costs
  • Proud Sponsor 2015-Denver Colorado Senior Law Day
  • Peer Review Rated For Ethical standards & Legal Ability TM Martindale Hubbell
  • Haystack