Exit & Liquidity Planning
Preparing to sell a significant asset such as a business, a music catalogue, or substantial real estate is a complex process that presents numerous opportunities for strategic planning. Effective exit planning can minimize taxes, facilitate ownership transfers within the family, and support philanthropic interests. Our comprehensive approach to exit and liquidity planning involves collaboration with a team of experts across various disciplines, often working together for months or longer to structure and execute the transaction efficiently.
Our Approach to Business Exit Planning
Pre-Transaction Exit Planning
We begin our process with a customized business exit strategy tailored to your specific needs and goals. Our meticulous pre-transaction planning lays the groundwork for a successful sale, helping to maximize the net proceeds of a deal done well. This stage includes:
Pre-Transaction Modeling: We provide detailed financial modeling to project future performance and value, identifying risks and opportunities to ensure a clear understanding of your exit strategy outcomes.
1202 Planning: Leveraging Section 1202 of the IRS Code to maximize Qualified Small Business Stock (QSBS) treatment to avoid capital gains tax.
Purchase Price Allocation and Cost Segregation: Optimizing the allocation of the purchase price and segregating costs to maximize tax benefits.
Equity Rollover: Structuring equity rollovers to defer taxes and retain an interest in the new entity.
Estate & Legacy Planning
Our exit planning services integrate estate and legacy planning to ensure your wealth is preserved for future generations. This can include:
Tax Optimization: Developing strategies to minimize tax liabilities and maximize net proceeds.
Using Private Assets for Charitable Goals: Structuring deals to support your philanthropic interests.
Trust Planning: Using trusts to shift asset growth to future generations or stack QSBS treatment.
Baird Business Owner Solutions
Baird Business Owner Solutions offers a suite of specialized services to support your exit plan, including:
Business Transitions: Guidance through all phases of business transition, from initial planning to final sale.
Value and Marketability Assessment: Evaluating your business to enhance its marketability and value.
Mergers and Acquisitions: Expertise in facilitating mergers and acquisitions to achieve your strategic objectives.
Post-Transaction Planning
Once a transaction is closed, there can be several opportunities to avoid capital gains taxes:
1031/721 (UPREIT) Exchanges Using Delaware Statutory Trusts (DSTs): Real estate investors who want to continue deferring taxes, but who no longer want to deal with the day-to-day management of direct ownership of real estate, can utilize a 1031/721 (UPREIT) exchange via a DST to defer capital gains into a private REIT.
Exchange Funds and Completion Portfolios: Investors that find themselves holding a large position in publicly traded stock can utilize exchange funds and completion portfolio to diversify their holdings in a tax-efficient manner. These portfolios can also offer opportunities to hedge or monetize the position using options.
Qualified Opportunity Funds: Qualified Opportunity Funds (QOFs) that invest in Qualified Opportunity Zones present an opportunity for a temporary deferral of capital gains, as well as the potential exclusion of capital gains from the QOF investment itself.
Collaborative Exit Planning Expertise
The Liles Group’s exit and liquidity planning capabilities are further supported by a dedicated team of attorneys and tax & estate planning specialists. We regularly consult with our Advanced Planning Team for assistance with technical matters and for help creating tailored solutions for our clients’ most challenging problems. Our collaboration extends to several external resources, ensuring comprehensive and expert support.
Why Choose Us for Your Exit Planning Needs?
We understand the emotional and financial complexities involved in exit planning. Our team is here to provide support and guidance every step of the way. Every client’s situation is unique, and we pride ourselves on delivering personalized solutions that align with your specific goals and circumstances. While many asset owners may only participate in a significant transaction once or twice in their lifetime, our team has years of experience across dozens of deals to help inform our process so that we can help you to make a smooth and successful transition to the next chapter of life.