Can you imagine walking into a new doctor’s office for your first appointment and saying, “doctor, what drug are you going to prescribe me? What is my treatment plan?” Hopefully, the doctor answers “whoa, I know nothing about you. Let’s start with me getting your history, then we’ll run some tests and figure out what’s wrong and come up with a diagnosis. Then, we’ll come up with a treatment regime.” This seems so obvious and it should be. Yet, do we apply this to our own profession?
Once or twice a week, I receive a call that goes something like this: “I gotta’ guy. He’s selling his business for $22 million soon. What should we do?”
“Do about what?” I ask.
“About the taxes.”
“Let’s slow down,” I say. Here are a few things I need to know:
What’s being sold? Assets or stock?
What type of entity? S Corp, C Corp, LLC?
What’s the nature of the business?
Is there a signed letter of intent?
Are there hot assets?
Is there negative basis? Recapture?
Debt?
How much does he own?
What else does he own?
What’s he trying to do?
How much does he spend to live every month?
Is he married? Children?
How old?
Other planning in place? Other advisors?
What’s your role? How do you know him?
This is just the beginning. Then, it’s possible to begin to understand the nature of the issues and, perhaps to suggest possible solutions. This is always my goal when helping my clients, advisors to high net worth families.
No prescriptions before history and diagnosis. We can’t hurry to the cure. It ‘s malpractice.