“It depends how you define value.”
For some business owners contemplating transitioning out of their business, maximizing the profit of a sale is not the only, or even primary, consideration. Having spent decades building a successful company, they often care deeply about its legacy, welfare of the employees, and the communities they serve, commonly asking: “How will I know that my business will be taken care of?” And: “How can I ensure my company will be in good hands 50 years from now?” The purpose trust is a relatively new structure that some business owners are using to meet these goals.
In this new report, Northern Trust experts discuss:
- How purpose trusts can be used by business owners to monetize their stake in the business, or alternately gift their shares, while ensuring their values are preserved for generations
- How business owners can use purpose trusts to: ensure the business is not sold to a third party after they have exited the business, continues to serve the community in which it operates, supports employees, and upholds specific business practices
- How the structure of purpose trusts allows the business to continue to grow and adapt to changing circumstances, but within the framework of values established by the trust
- The implications of varying options for ownership transfer and financing
- A checklist for determining if a purpose trust is right for you
How Northern Trust Can Help
Our experts have deep experience working with business owners to combine complex estate planning strategies with the ownership transition of a private business. Our trusts and estates practice has served as trustee of purpose trusts holding private businesses, and our business advisory practice helps business owners evaluate strategic alternatives for transitioning ownership. Download the report to learn more and understand if a purpose trust could be appropriate for your business.
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