Practitioner's Guide to Valuation in Business Succession and Estate Planning
For the advisory professionals navigating complex business interest transfers.
Business interests are frequently the most complex asset within an estate — and among the most consequential to get right. When the underlying valuation analysis is inadequate, the exposure it creates cannot be fully offset by sophisticated planning elsewhere. The situations where this matters most are recognizable: a business interest transfer the IRS questions, a tightly held founder-led business that’s difficult to benchmark, carried interest whose value depends on waterfall mechanics most generalist appraisers have never modeled, a buy-sell agreement whose price no longer reflects economic reality.
Houlihan Capital developed this guide for the attorneys, CPAs, and wealth advisors whose clients face these situations.
Who This Guide Is For
The Practitioner’s Guide is designed for:
- Estate planning attorneys advising clients on business interest transfers, gifting structures, or succession planning
- CPAs and tax advisors working with closely held business owners on estate and gift tax reporting
- Wealth advisors and family office professionals with clients who hold illiquid, owner-dependent, or fund-related assets
- Any advisory professional who needs a clearer framework for identifying when independent valuation support is warranted — and how to engage it
Whether you have a specific client situation in front of you or are building your working knowledge of this area, this guide provides a practical reference you’ll return to.
Why Advisors Work With Houlihan Capital
Houlihan Capital is an independent, employee-owned valuation and investment banking firm. Our work in trust and estate valuation spans business interest transfers, carried interest, management company equity, and closely held structures where standard approaches require significant adaptation.
- Focused experience across the asset types that present the greatest complexity in estate and succession planning
- Deep understanding of where IRS scrutiny is applied and what level of analytical rigor and documentation is required to support a conclusion over time
- Senior-level execution on every engagement — not a process handed off after the initial conversation
- Each engagement approached as part of the advisory team, with the goal of integrating cleanly with the legal and tax strategies counsel and advisors are designing
Independent. Employee-owned. Conflict-free.
What You'll Find Inside
- Personal Goodwill
Most founder-led businesses carry value that belongs to the individual, not the enterprise. Mischaracterizing that split creates risk in both directions. This section covers how personal goodwill is identified and supported in business sales, succession structures, and divorce proceedings — and what a defensible analysis requires. - Business Interest Transfers
FLPs, GRATs, SLATs, and similar structures work as intended when the valuation analysis supporting the transfer is rigorous. When it isn’t, these structures attract IRS attention at exactly the moment the client’s estate is most exposed. This section covers discount analysis, underlying business value, and the analytical considerations that vary across transfer structures. - Carried Interest
Carried interest is contingent, illiquid, and governed by waterfall mechanics that most generalist appraisers are not equipped to model. This section covers the analytical frameworks applied to carried interest valuations and the planning considerations relevant to timing a transfer. - Management Company Planning
The management company is often a significant and underplanned component of a principal’s estate. This section covers how management company interests are valued for gifting, buy-sell, and generational transfer purposes — and why coordination among valuation, estate planning, and tax advisors matters. - When to Engage a Valuation Advisor
A framework for identifying the client situations that warrant independent valuation support, what to expect from a well-structured engagement, and how early engagement produces better outcomes than reacting after structural decisions have been made.
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The right time to engage a valuation professional is before the structure is designed, not after.
Houlihan Capital works alongside estate planning attorneys, CPAs, and wealth advisors on the client situations where valuation complexity is highest. Independent analysis, senior-level execution, no conflicts.