SELLING YOUR BUSINESS • PART FIVE

SELLING YOUR BUSINESS  •  PART FIVE  

The Family Factor 

Once you’ve worked through the first four steps, we need to look beyond the personal planning and valuation process and consider the implications for family .  

There are two considerations here: taking care of family, and making sure the family emerges from this transition on speaking terms. This can be one of the most difficult parts of navigating a business transition — I’ve seen both play out, families that emerged in good shape , and others that were fractured and split.  

Here again, planning is paramount. Good planning, mixed with fairness, diplomacy, wisdom, and communication, makes all the difference to a successful transition. The seller — typically the majority owner — needs to solicit input from family members affected by the sale and take their concerns into consideration.  

Will Family Members Be Included in the Buyout?  

If other family members hold an equity stake in the business, will they be included in the buyout, or do they wish to exit at the completion of the sale? If they have an equity position in the firm, there needs to be transparency throughout the valuation process and in all the deal terms.  

Will Family Members Retain a Leadership Position?  

Who will be the decision-makers once the sale is completed? Will family retain control, or will outside members come into the business with control? If outside members are coming into what was a family organization, the dynamics will change drastically — especially if control is handed over. Will family members have direct lines to the new leadership for access and influence?  

Just as there needs to be transparency in the valuation process and the deal itself, there also needs to be transparency for family members who remain with the business after the sale — what their defined role, access, influence, and control will look like going forward. Another consideration is whether any family members will remain on the board . The board holds the ultimate control, authority, and oversight; how will its dynamics change, if at all?  

What Protections and Incentives Will Exist for Family Members Who Remain?  

Defined roles and job descriptions, along with employment agreements, should all be finalized before the sale closes. This can provide a measure of job security for the near and longer term. Clarity on these issues is key to avoiding misunderstandings and assumptions. For retention bonuses, milestone bonuses, and similar arrangements, my advice is that all of these documents be reviewed by counsel before the close of sale. I’ve too often seen things go sideways after a sale because of informal discussions and assumptions that were made but never formally defined and clarified.  

What About Family Members Not Involved in the Business?  

It’s still important to keep family informed of developments in the sale. Regardless of their level of participation, there are always emotions connected to an event like this. If the net proceeds from the sale, combined with other assets in the estate, exceed the estate tax threshold —  currently $15 million per individual, or up to $30 million for a married couple using portability ¹ — the entire family will need to be aware of the tax issues involved, and of the plan we’ve put in place to avoid or reduce the impact of the estate tax on the family.  

Helping you plan to keep more of what your work for

¹ Source: One Big Beautiful Bill Act, Pub. L. 119-21 (2025), amending Internal Revenue Code §2010(c); IRS Revenue Procedure 2025-32 (2026 basic exclusion amount of $15,000,000 per individual). Married couples may combine their individual exemptions through a portability election. Exemption amounts are adjusted annually for inflation.

This article is for general informational purposes and is not personalized financial, legal, or tax advice. Please consult with a qualified professional regarding your specific situation. Neither Cetera Wealth Services LLC nor any of its representatives may give legal or tax advice.  

Securities offered through Cetera Wealth Services LLC (doing insurance business in CA as CFGAN Insurance Agency LLC, CA Insurance Lic# 0644976), member FINRA/SIPC. Advisory services offered through Cetera Investment Advisers LLC, a registered investment adviser. Cetera is under separate ownership from any other named entity.  

Sean Bracey, Financial Advisor  

Three Pointe Drive, Suite 201, Brea, CA 92821  

(562) 902-6560 | www.Montagewealth.net