If you own a business or have a professional practice, a significant part of your planning will include preparing for the eventual transfer or sale of the business.


Planning in advance for this eventuality is imperative. You need to identify the team of professionals that you will work with through this process. It is also very important that these trusted team members coordinate their efforts to ensure that you get the very best outcome. Some of the issues that need to be considered during this process include:

  • Have you taken the steps to properly value your business?
  • If it's a sale, is it likely to be a share or an asset sale?
  • Have you done the necessary planning to ensure that you will be eligible to use your lifetime capital gains exemption of $835,000?
  • Have you structured your planning to potentially allow for tax planning, which will include accessing the lifetime capital gains exemption from other family members?
  • Is your continued involvement after the sale or transfer of your business a consideration?
  • Would implementing an estate freeze, which would ultimately pass on the future growth of the business to the next generation (assumes a family owned business) make good planning sense?
  • Have you identified who your likely successors will be? Do they know? Are they qualified and prepared to take on this responsibility?
  • Have you taken steps to ensure that the key employees will continue on in the business?
  • If it's a closely held business, have you ensured that you have separated the family dynamics from the business dynamics?
  • Have you established defined timelines to complete the sale and/or transition?
  • If the business or practice forms a significant portion of your net worth, have you ensured that the terms of the sale will meet with your income requirements?
  • Are you ready to retire?

These considerations and questions cover a range of issues pertaining to the succession process. Clearly, there are numerous considerations which go well beyond the scope of this discussion. The process is dynamic, complex, and unique to everyone. Given that in many cases the business can form a significant part of the individual or family's overall net worth, you can clearly see why such careful and meticulous measures must be taken. It takes a lifetime to build a successful business or practice, and it must be treated accordingly.