FINANCE
look at the really successful families , the big family businesses , they know this ,” says Peter Johnson , director of the University of the Pacific ’ s Institute for Family Business . “ What I ’ m hoping will come out of this is a more sophisticated view from the average family business owner where they say … OK , at the end of the day , we want to pay as little as possible to the government , and let ’ s put together a plan to make that happen .”
That requires a multidisciplinary team : a lawyer , tax professional , accounting professional and financial adviser , says Goralka . “ Above all , the focus should be on the client ’ s overall business succession planning and not simply lower tax ,” he says . Part of the reason businesses don ’ t invest in devising one is expense . “ It can cost $ 20,000 , $ 40,000 , $ 80,000 to do this ,” says Johnson . “ But what are you buying ? You spend $ 50,000 and do all this planning and maybe it saves you $ 2 million in taxes in five years . Is that a good investment ? Yes .” Families should think of it as an insurance policy they ’ ll definitely use at some point , he says .
These strategies require time to create . “ Often people will call me and say , I ’ m selling my business Tuesday . How do I avoid a tax rise ? And that ’ s too late — you need to have the plan in place before the deal is struck ,” says Goralka .
But having one also means if a tax proposal catches you by surprise , you ’ ll be ready . Though Oneto wasn ’ t tracking the Biden administration ’ s proposal , he thinks KLM Ranches is prepared . As yet , there are no children in the next generation lined up to take over ; they all work in non-farming jobs . Could that change ? “ Right now we don ’ t have a bloodline behind us — maybe — but as of right now , no ,” Oneto says .
Whatever happens , Oneto ’ s parents did a lot of estate planning , and they ’ re set up as a corporation , with the land held by limited liability companies . So if the tax rules or the family ’ s circumstances change , “ we should be all right ,” Oneto says .
Steven Yoder writes about business , real estate and criminal justice . His work has appeared in The Fiscal Times , Salon , The American Prospect and elsewhere . Online at www . stevenyoder . net and on Twitter @ syodertweet .
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62 comstocksmag . com | October 2021