One of the main objectives of estate planning is to control how assets are distributed upon the death of the estate being planned. Because the sales of a business often generates significant assets that need to be incorporated into any estate planning process or because assets in the business may be included in a will or trust, it is important to determine how business assets included in the estate are distributed.
There are often important issues to be considered in defining asset distribution:
- How much is intended to be given to each recipient?
- Are there secondary recipients defined, if the primary recipient is no longer alive?
- Are there any restrictions on any asset being distributed?
- Are there different tax treatments for different distribution methods or for different recipients?
- Are any distributions being made that skip a generation?
- Are some assets more marketable than other?
- Will there be estate or gift taxes due? How will these tax payments be funded?