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retirement and business succession planning BUCKINGHAM, DOOLITTLE & BURROUGHS, LLC

Are You Ready to Transition Your Business? By Michael L. Wear Are you ready to transition your business? Have you considered whether you want to sell it to your employees? To a strategic buyer in your industry? Or do you have a family member who is ready to take the reins and lead the business into the future? Assemble your team of advisors. You will want an attorney with mergers and acquisition experience and an estate planning attorney. Add an accountant familiar with your industry and experienced in business and personal taxes, and a business valuation ex-

pert. You will also need a financial advisor who will take a holistic view of your situation, before and after the transition. Consider adding an insurance specialist. This team will help determine the value of your business, deal structure, potential tax consequences, and how to manage your assets after completing the transition. Another advisor to consider adding to the team is a business psychologist to help you and your family deal with the important intrafamily emotional issues relating to the transition of the business, regardless of whether you sell the business or transition it to a family member. The psychologist can guide the family through these issues and make it possible for your

family to enjoy Thanksgiving dinners in the future. Define your goals and objectives. What do you want from the business? Do you want the option to continue working after the transition to a new owner? Do you need cashflow for your retirement? Do you have charitable goals? It is important to determine what matters most to you based on your unique situation. Use your team of advisors to refine your desires into concrete goals and objectives that will help focus your options for transitioning your business. Weigh your options. In this step, your team of advisors will provide alternatives to meet your specific goals and objectives.

Your team will give you the pros and cons of each option, including potential tax consequences, relative to your specific goals and objectives. Your team can give you the alternatives, but you will decide the fate of your business. Move forward with confidence. Once you have decided on how you want to transition the business, move forward with confidence that you and your team have laid out a successful strategy to make it happen. Are you ready? Michael L. Wear, AEP®, is a Trusts & Estates partner at Buckingham, Doolittle & Burroughs, LLC. Contact Mike at 330.258.6424 or mwear@bdblaw.com

estate and trust administration HINDMAN AUCTIONS


Evaluation and disposition of tangible personal property

Considerations in trust funding

By Carrie Pinney A vital part of any estate plan is arranging for the distribution of personal property; the items we surround ourselves with that tell the story of our lives. While many of these items hold sentimental value, others hold monetary value. But how do you differentiate between the two? There are two main avenues to consider when determining the value of your property. If a value is needed for estate tax, insurance or donation tax purposes, a formal appraisal is required. A qualified appraiser will prepare IRS and Uniform Standards of Professional Appraisal Practice (USPAP) compliant reports. If you are merely curious about what something is worth were you to sell it today, a formal appraisal is not necessary. To obtain this fair market value, you should consult someone who specializes in the sale of the type of item, such as a dealer, auction house or knowledgeable collector. Seeking out multiple opinions on the value of your property can help you to understand a realistic market value. When handling the disposition of personal property from an estate, the appropriate

outlet will depend on the type of property. General household goods and contemporary furnishings may be best served by selling through an estate sale. Consigning property to a consignment shop will allow you to remove items from the premises, and you will realize a profit upon the sale of the property. Auction is a popular outlet, particularly when the property involved is collectible. Auction houses work with collectors, fiduciaries, and families to discuss the appraisal of estates, collections or single items and subsequent sale to an international client base. Any reputable auction house will be able to provide you with a complimentary evaluation and suggest the best avenue for disposition of your property. When researching auction houses, consider the firm’s reputation for customer service and the material they frequently handle. What collecting categories does that firm handle? How do the sold prices compare to the auction estimates? How many items do not sell? How are items described and illustrated? There’s nothing better than having a direct conversation with a representative from the firm to make sure that their goals align with yours. Carrie Pinney is a Business Development Manager, Cleveland. cleveland@hindmanauctions.com.

If you are merely curious about what something is worth were you to sell it today, a formal appraisal is not necessary.


By Mary Eileen Vitale, CPA, CFP®, AEP®, Principal, HW&Co. A trust is a common estate-planning tool, used to manage and control the distribution of your assets in the event of your death or incapacity. However, a trust can be completely ineffective if not properly funded. Many people incorrectly assume that trust funding is complete once they have signed the trust document; however, executing the trust document is only the beginning. For a trust to function, the trustee must hold title to the assets owned by and, therefore, subject to trust provisions; consequently, each asset to be owned by the trust must be retitled to reflect trust ownership. Failure to transfer assets to the trust defeats its management purpose and, in the future, could expose trust assets to the unnecessary time and expenses associated with probate. What Types of Assets Can Be Owned by a Trust? A trust can own several different types of property, including: • Cash and liquid securities: checking accounts, savings accounts, certificates of deposit, and money market accounts • Non-retirement brokerage and mutual fund accounts • Physical stock and bond certificates Personal property, such as jewelry, furniture, art, etc. • Nonqualified annuities • Life insurance contracts • Real estate • Business interests

• Notes and other debt instruments How Do You Transfer Ownership of Property to a Trust? For most assets, transferring ownership is relatively simple: • Bank and brokerage accounts typically require completion of new account paperwork in the name of the trust, along with signed authorization to transfer assets from the current account to the trust. • Physical stock and bond certificates require a change of ownership to be completed with the stock transfer agent or bond issuer. • Life insurance and annuity contracts also typically require submission of a change of ownership form to the contract issuer. Some assets require more effort to properly change title: • Personal property without a legal certificate of title is commonly listed on a schedule accompanying the trust to reflect that the trust owns those assets. • Assets with certificates of legal title require the owner to quitclaim ownership interest in the asset to the trust. Other Considerations: To avoid unintended consequences, it is very important to fund the trust in a timely manner. It’s also important to work with your advisor when determining which property the trust should own. There are several variations of trusts, and each trust may have a specific role in the estate plan and require specific assets to fund it. Mary Eileen Vitale, CPA, CFP®, AEP® is a principal in HW&Co.’s Tax Services Group and is a frequent speaker on estate planning, financial planning and other various tax topics.