woman and man kneeling in vineyard

A Trust that Can Help Revitalize Your Family Business and Your Personal Finances

A successful family business can grow monumentally over time. In fact, about a third of Fortune 500 companies are family controlled, including Walmart, Ford Motor Company and Cargill, per a 2018 SCORE survey. But growth can be a double-edged sword, LNWM’s Carla Wigen points out today in an article in the Puget Sound Business Journal.

Yes, growth can create employment and financial opportunities for multiple generations, Carla points out. But it can also keep the current owners locked into the business — and the taxes that come with it. One solution: a special type of irrevocable trust called a Grantor Retained Annuity Trust, or GRAT, which we help to set up and manage for our business-owning clients.

A GRAT can be a vehicle for revitalizing a family business by transferring ownership shares to future generations, bringing in family members not currently involved with the business, or as a way to give an equity stake to existing partners that can expand in-house expertise, all while the current owners maintain majority control of the business, generate cash flow for themselves, and minimize personal estate and gift taxes.

To find out more about GRATs, read Carla’s PSBJ article (subscription required for access).