Wednesday, June 20, 2007

At What Point do You Need to Have an Exit Strategy in Place?

If you have an asset such as a business, a stock portfolio, real estate or a pricey collection it is never too soon to educate yourself about how you plan to exit or sell. Although a lot may change before the actual sale, you never know exactly when some unforeseen event may trigger the need to sell.

As to how soon you should have a specific strategy in place, the answer is definitely prior to close.

Below are some of the main considerations which need to be taken into account.

1. Your age now and your age at time of sale
2. The amount of gain you will potentially realize and the amount you’d owe in taxes if you had to pay at time of sale.
3. Your need for income- now or in the future
4. Whether or not you are at a point in life where you can invest the proceeds in anything with risk of loss or if you need asset protection.
5. Your needs to provide for your heirs.
6. Your estate planning needs and charitable intent, if any.
7. Any other income and assets you have and how the sale of the one in question might impact the rest.
8. The manner in which title is held and if the proceeds must be divided.

There are a lot of important factors with each unique situation. You need to work with someone who not only keeps up on the ever changing tax laws, but who also has the ability to guide you in the right direction that will meet your goals and make sure everything is done right.

There are good educational resources available at if you’re in the research stage.

If you have a current sale pending, fill out a Qualification Questionnaire at and find out what you need to get started on right now.

Paula Straub