Structured sale(s)

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Apr 28, 2008 2:41 pm

I have 2 clients looking to sell their businesses in the next 3-6 months and am trying to do some structured sale research.  I have spoken to Crail Huntly and just started gathering info today, and am wondering if anyone here has any insight?  Seems like an awful rigid plan, but tax delay is a powerful motivator.

Apr 28, 2008 4:02 pm

It seems to make sense if you don't need a lump sum from your sale.  I have never seen details on the types of annuities purchased for the sale.  In other words, what is the death benefit on the annuity?  How is it structured?  What if you need to access it?   Also, what about estates?  I believe you do not take constructive receipt of the annuity, so what are the implications on your death? 


It seems like a fantastic wealth-preservation tool for a business owner who is retiring and wants a stream of income, and may possibly buy an annuity anyway (with after-tax proceeds of sale).   Also, no concern with security of income stream (versus self-financing a sale).
 
COuld a B/D act as an intermediary in this situation?  The buyer buys an annuity and makes the seller the owner of the annuity?
Apr 29, 2008 3:12 pm

Is this a legitimate strategy? I did some reading on it last night, and to say the least, am fascinated by the concept.


There are a couple things, however, that make me a tad leery: the use of an immediate annuity at a company located in Barbados, and the myriad websites promoting their books on structured sale strategies through those corny websites that are infomercials in print form.
 
I have a client who's getting ready to sell a good bit of land, and this concept has gotten my attention.
 
Apr 29, 2008 3:44 pm

borker-have you checked into 1031 exchanges for the land sale?

this is not somethng done in barbados.  the company i am researching right now uses an allstate annuity product.  they are located in overland park, kansas.  check out crailhuntly.com, this is who i am referring to.  and i have never used them, so this is not an advertisement.
from my understanding the annuity does not have to be an immediate annuity, you can delay payments for awhile.  my research has told me the annuity is custom fit to clients income desires.  the main negative(s) i see are lack of any control and once you flip the switch, just like most other annuities, you are locked in.  i do not know at this point how the estate/beneficiary situation is handled either.
Apr 29, 2008 4:58 pm

The main negative I see is how do YOU get paid for YOUR efforts?

Apr 29, 2008 6:09 pm

TIC or DST