Estate Planning Valuation

Our estate planning valuations are prepared to estimate the value of a business or ownership interest for estate and succession planning purposes. The valuation is developed as of a specified valuation date and is intended to assist business owners and their advisors in evaluating ownership transfer strategies, succession planning, and long-term planning objectives.

The analysis is designed to produce a clear, well-supported indication of value that aligns with generally accepted valuation standards and can be relied upon by business owners, attorneys, and tax advisors for planning and advisory purposes.

METHODOLOGY

The valuation methodology is selected based on the nature of the business, the quality of available financial information, and the characteristics of the ownership interest being evaluated. One or more generally accepted valuation approaches may be applied, including the Income Approach (capitalization of earnings and discounted cash flow analysis), the Market Approach (guideline transaction method and market multiple analysis), and, when applicable, the Asset-Based Approach (adjusted net asset value). The selected approaches and their relative weighting are fully explained in the valuation report and tied to the planning objectives being considered.

FINANCIAL STATEMENT NORMALIZATION ADJUSTMENTS

Historical financial statements are reviewed and adjusted, where appropriate, to reflect normalized operating results on a market-participant basis. Because financial statements are often prepared for tax or internal purposes, they may include non-recurring, discretionary, or owner-specific items.

Normalization adjustments may include owner and related-party compensation, discretionary or personal expenses, non-recurring or non-operating items, and related-party transactions (including rent), to reflect market-based terms. The resulting normalized financial results represent the earnings a hypothetical market participant would consider when evaluating ownership transfer and succession planning alternatives.

DISCOUNTS FOR LACK OF CONTROL AND LACK OF MARKETABILITY

For estate planning purposes, valuation discounts may be evaluated depending on the characteristics of the ownership interest and the proposed planning structure. These discounts reflect the economic realities associated with non-controlling or illiquid ownership interests and are commonly analyzed as part of estate and succession planning.

Discounts may include a discount for lack of control when the ownership interest does not confer decision-making authority, and a discount for lack of marketability to reflect the limited liquidity of interests in privately held businesses. The potential applicability and estimated magnitude of such discounts are discussed in the context of planning scenarios and ownership structures and are fully explained in the valuation report.

INFORMATION REQUIRED FROM THE CLIENT

To complete an estate planning valuation, we typically request federal tax returns or financial statements for the past three to five years, along with a current or most recent balance sheet and a completed questionnaire covering the company’s operations, ownership structure, and management. Additional documents may be requested as needed following the initial analysis.

TIMELINE AND DELIVERABLE

Once all required information is received, the valuation process can begin. Most estate planning valuations are completed within 2–3 weeks, depending on the complexity of the business and the availability of information. The final deliverable is a comprehensive written valuation report prepared to support estate planning, succession planning, and ownership transfer analysis.