When a New York estate includes a privately held business, determining its value can be one of the most important aspects of the probate process. With more than 23 years of valuation experience, Lakelet Advisory Group (LAG) provides independent, accredited business valuations that help executors, trustees, attorneys, and families navigate complex estate matters with confidence.

An independent, accredited business valuation provides an objective and well-supported conclusion of value that helps minimize disputes, facilitates estate administration, and withstands scrutiny from beneficiaries, attorneys, courts, taxing authorities, and the IRS.

An inaccurate valuation can create significant complications, including disputes among beneficiaries, challenges to estate tax filings, delays in business succession, and even probate litigation. Conversely, a professionally prepared valuation provides a credible foundation for tax reporting, equitable distributions, and informed decision-making during an already difficult time.

As business ownership continues to represent a growing portion of personal wealth, a well-supported business valuation is becoming an essential component of successful estate administration. For families, fiduciaries, and legal professionals, understanding the importance of a defensible valuation is no longer just a financial consideration—it’s a critical step toward achieving a smooth and successful probate process.

There is no doubt that exit planning and its execution are complex and challenging. The exit planning is critical and can save the seller a significant amount of funds. With a fifteen-month plan to exit your business with the proper planning and execution – the seller should be able to add another 30% to his / her net proceeds. This is possible because it:

Provides you with the time to properly “clean-up” the balance sheet;

Eliminates unnecessary costs. Remember that each dollar you save or add will within the next 18 months generate a significant result. For example, if the company has a valuation multiple of 6, then every dollar improvement in EBITDA generates you, the owner, 6 dollars. This is not a bad ROI. The general pitfall is there are “too many sacred cows”;
Allows the inventory to be optimized;
Assures you have the right team. Too many low / middle market companies do not have the bench strength once the owner leaves. Or even worse, the bench strength comes from family members. Develop a team knowing the short-term and long-term strategy and share the upside opportunity with them. If done properly, these key individuals will generate their savings several fold in comparison to the costs;
Incentivizes all the key players to ensure everyone is on the same page; and
Gives you time to meet with your tax advisor very early in the process to ensure you minimize your tax exposures and / or obligations. Ensure that your tax advisor is an expert in the M&A phases of business. This is a very complex set of transactions – this is not the time to have an inexperienced player. After all – this business sale may be the most important financial transaction in your life.

From a tax perspective, you, the owner, should have a solution to the following tax issues:

What Type of Entity Do You Use to Conduct Your Business?
Is a Tax-Free Deal Possible?
Are You Selling Assets or Stock?
Allocation of Purchase Price is Critical.
Other Payments to Sellers; Personal Goodwill.
Installment Sales (Seller Financing) and Escrows.
Earnout/Contingent Payments.
Outstanding Stock Options.
State and Local Tax Issues.
Pre-Sale Estate Planning.

The Hidden Challenge in New York State Probate: Valuing a Business Interest

Tax Planning for Exit Strategies