March 17, 2025
For mid-sized business owners in the U.S. and Canada, estate planning is a crucial yet often overlooked aspect of preparing for a business sale. Without a well-structured estate plan, owners risk financial inefficiencies, legal complications, and unintended tax burdens for their heirs. If you’re considering selling your business in the near future, avoiding these common estate planning mistakes can help protect your wealth and legacy.
Many business owners view succession planning and estate planning as separate processes. However, these should be closely aligned to ensure a seamless transition. Without a coordinated approach, disputes among heirs, legal challenges, and financial inefficiencies can arise.
Work with M&A, financial and legal advisors to integrate your business transition into your overall estate plan. For example, Woodbridge is a Mariner Company, which gives our M&A clients direct access to the services of our parent company’s advisory expertise — ranging from estate, tax, and retirement planning to investment management, asset protection, and insurance.
A lack of tax planning can lead to unnecessary estate taxes, capital gains taxes, and other financial burdens that diminish the value of your business assets.
The U.S. and Canada have different tax implications for business sales, and structuring your estate plan to minimize tax liabilities — such as utilizing trusts, gifting strategies, or charitable donations — can significantly preserve your wealth.
Business owners often underestimate the liquidity required to settle estate expenses, taxes, and distributions to heirs. If most of your wealth is tied up in the business, your heirs may be forced to sell assets at an inopportune time to cover costs.
Implementing strategies like life insurance, structured buyouts, or a business continuity plan can help ensure liquidity when it’s needed most.
An outdated estate plan can lead to unintended consequences, including conflicts between beneficiaries, exposure to new tax laws, and failure to reflect changes in business valuation.
Regularly review and update your estate plan to align with your current financial situation, family dynamics, and legal requirements in both the U.S. and Canada.
Estate planning for business owners is complex and requires a team of professionals, including M&A advisors, estate attorneys, tax professionals, and financial planners. Attempting to manage the process alone can lead to costly mistakes.
Engage specialists who understand the nuances of business sales and estate structuring to ensure a smooth transition and optimal financial outcomes. When you partner with Woodbridge to sell your mid-sized business, you not only get expert M&A advisory services, you also get direct access to our parent company Mariner’s wealth of advisory expertise, which includes all aspects of estate planning.
Selling a business is a significant financial event, and a well-structured estate plan is essential to protect your wealth and legacy. By avoiding these five common mistakes and working with experienced advisors – preferably M&A advisors who work hand-in-hand with legacy and estate planning specialists – business owners in the U.S. and Canada can ensure their estate plans support their long-term goals and provide financial security for future generations.
Woodbridge is now a Mariner Company, which means all our M&A clients benefit from the advisory expertise of our parent company. Book your obligation-free appointment with a Woodbridge M&A expert today to find out how we can help sell your company while ensuring proper estate planning and wealth legacy.
Top Tip: Listen to Episode 46 and Episode 52 of our podcast Secrets to Selling Your Business for more in-depth insights on estate planning and legacy preservation.