Tax policies significantly influence a family business owner’s ability to plan for the transfer of business and family assets in a way that is most supportive of business continuity and for the preservation of those assets. The estate tax tends to be the most popular discussion in this area. The debate usually surrounds the transfer of wealth within the same family, and the government’s right to a portion of that wealth.

With a split Congress having to either address the estate tax issue again before the end of 2012 or allow the tax to return to a top rate of 55% and an exemption of $1 million, this uncertainty will clearly have an impact on how family business owners plan for the future of their companies.

FEUSA intends to focus its efforts on the impact the estate tax has on the continuation of a family business.

• Planning to reduce a business owner’s estate tax liability usually takes years. Significant financial resources are allocated to this planning process - resources that could be reinvested to grow the business.
• Without extensive advance planning and ongoing monitoring of one’s situation, there can be a need for a partial or complete liquidation of assets at the time of death in order to cover the tax burden.

Limited research is available to show the substantial amount of financial resources and time America’s family business owners expend to manage their estate tax liability in terms of tax planning, purchasing insurance and other activities. FEUSA will work to gather this data and then outline how those resources could be better spent on business growth and job creation. FEUSA will encourage Congress, through its own educational efforts and those taking place in existing coalitions, to address this key issue from a family business perspective.