To the owner of a successful business, the company represents much more than a workplace: it is his or her life’s work. Hence, the decision to sell is often fraught with emotion. Sellers may struggle with issues such as ceding control, preserving their legacy, or deciding what to do each morning.  A host of financial issues add to sellers’ uncertainty.  Business owners who have relied on the relatively  stable earnings of their private companies must now live off the far less predictable returns from the capital markets. Ultimately, how sellers choose to invest may make the difference between success and failure in meeting their goals and securing their financial future.

In this article, we explore the key tax and investment planning questions faced by sellers to an employee stock ownership plan (ESOP)1 and provide a framework for making thoughtful decisions by examining a hypothetical case similar to several we have encountered and answering the hypothetical clients’ questions. Continue reading....