Understanding family businesses and planning their transfer from one generation to the next is what Rollings, Shaw & Associates has been doing for almost 40 years. Family businesses are built on heritage and tradition.  We know the importance of passing the business from one generation to the next.  Increasing values and a restrictive Tax Code conspire against business owners who want to keep their business in the family.  Unfortunately, the tax laws do not allow you to "give" the business to the next generation. Limitations on the size of gifts and the increasing value of businesses seriously affect passing ownership of your businesses (without a forced tax sale) to your natural successors.

Tax Structuring and a Solid Plan
Gone are the days when a family could count on Dad and Mom just handing over the business. The market values of some family businesses are astounding, and the taxing authorities are just waiting. The I.R.S. and state taxing authorities know it would take a lifetime to pass a small business using just the Annual Gift Exclusion. Even the combined husband/wife Annual Gift Exclusion has little effect on a $2,000,000 business. It takes a solid, sophisticated, plan to get it done.

We Begin With An Understanding
Succession planning begins with an understanding of the family's goals, an analysis of the abilities and resources of the intended successor, and some hard-hitting questions on the ability of the next generation to succeed. Commitment, ability, a desire to succeed, and natural instincts, must all come together before the financial issues can be addressed.

No "One Size Fits All"
The mountain gets even bigger when the financial issues are approached. It is here that the experience of Rollings, Shaw & Associates is a necessity. We start with a survey of the various tools and techniques which accomplish the goals of the family and minimize or eliminate the potential of heavy taxation. Gifting, long-term purchases, Family Limited Partnerships, corporate restructuring, and the interplay with your estate must be considered. Also assuring that the children who are not in the business are treated fairly is a frequent concern.

Family Limited Partnerships (FLP)
Rollings, Shaw & Associates understands Family Limited Partnerships, a sophisticated, and yet very powerful succession planning tool. FLPs allow the family to:

  1. Retain operating and financial control in the parents while passing ownership to the children;
  2. Shelter the interests passed to children from creditors or divorcing spouses;           
  3. Provide an orderly transition of the business, especially on death;
  4. Provide tax relief both in the gifting process and on death of the parents.

Family Succession Planning involves a working knowledge of the law, taxation, and accounting, as well as the practical sense to bring them all together. Who understands FLPs? More importantly, who has actually put them together, valued them and has the practical experience to guide the family through the Internal Revenue Code, the law and the documents? Rollings, Shaw & Associates, that's who.  We have counseled families and implemented Family Limited Partnerships from start to finish.

Rollings, Shaw & Associates, P.C. will smooth the transition to the next generation, and help you minimize or eliminate the high taxation that can accompany a poorly-planned transfer.

Copyright 2008. All Rights Reserved. Rollings, Shaw and Associates, P.C.

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