Family Businesses

News & Analysis as of

Diving into Family Philanthropy

Over the next several posts, we will be diving into the topic of family philanthropy. Since the topic is so broad, we have divided it into segments that we will cover in the coming weeks. Each segment is intended to give you...more

Update on 2704 Proposed Regulations and Impact on 2016 Gift Tax Reporting

Following the December 1, 2016 public hearing, the IRS reportedly began working on revisions to and clarifications of the new 2704 proposed regulations. While the uproar from the estate planning and accounting communities...more

How to protect your family-owned business from your child’s spouse

For most people, a child’s wedding is one of those great life moments that is filled with months of planning and excitement. However, for people who own a family-owned business, the old myth that 50 percent of marriages end...more

Are you paying your children too much to work in the family business? The IRS might think so.

A United States Tax Court recently issued a decision after trial that should serve as a reminder to management and controlling shareholders of family-owned businesses that salaries or other compensation paid to family-member...more

Top Highlights from PwC Family Business Survey

PwC, one of the “Big Four” accounting firms and a consulting titan, released its latest periodic survey of United States family businesses. PwC performs this survey every two years and has been doing it for ten years now. ...more

Has New Jersey Gone Off Its DLOM Rocker?

Whenever I contemplate New York’s unusual case law on the discount for lack of marketability (DLOM) in statutory fair value buy-out proceedings, I cast my eyes westward, to the far banks of the Hudson River, and take comfort...more

Form Over Substance Sometimes Prevails in Tax Law – Estate of George H. Bartell et. al. v. Commissioner

In most areas of law, substance prevails over form. Code Section 1031 is possibly one of the few exceptions to this time-honored rule of jurisprudence. Under Code Section 1031, form may prevail over substance. The U.S. Tax...more

How an Advisory Board Can Help Your Family-Owned Business

What is an advisory board? Family-owned businesses often form advisory boards as a source of guidance. Advisory boards differ from the board of directors discussed in this prior blog post in several respects. Primarily,...more

The Future Of Proposed IRS § 2704 Modifications Is Uncertain

Proposed changes to Internal Revenue Code (IRC) § 2704, which would impact the valuation of transfers of family business interests at death, come at an interesting time politically given the Trump Administration’s desire to...more

A Word of Advice: Address Estate Planning Sooner Rather than Later

Earlier last month the New York Times ran an article about basic reasons why you need to pay attention to your family’s estate planning. The article made me think of several instances where families would have benefited from...more

Carefully Consider the Scope of Releases When Settling Claims between Family-Business Owners

Litigation among family-business owners often ends with a negotiated settlement agreement instead of a trial and entry of judgment on the parties’ claims.  Through a settlement, the parties have the flexibility to agree upon...more

Family Feud: Commercial Division Dissolves LLC Owned by Quarrelling Brothers

Justice Timothy J. Dufficy in the Queens County Commercial Division recently entered an order dissolving a limited liability company owned by two brothers whose disagreements regarding the management of the LLC culminated in...more

Trademarking Your Name Can Drive You To Drink: The Risks and Benefits of Naming a Beer After Yourself

You have worked hard, you are proud of your beer, and you want the market, if not the world, to know that it is your product. At the end of the creative process, like any other artist or craftsperson, you have the urge to...more

U.S. Family Office Branches for Non-U.S. Families: The New Paradigm

The family office has become wealthy families’ preferred vehicle to manage, preserve and protect wealth for future generations. The meaning of a family office varies wildly depending on the family — a trait that demonstrates...more

The Best of 2016: Quotes on Family Business

As we launch full steam into the first quarter of 2017, there are several opportunities to reflect on the successes, failures and more memorable moments of the family business community in 2016. There are also several...more

Defining the Role of a Board Chair

The prior Family Business Advocates blog post provided an overview of the different legal roles that shareholders, directors, and officers play in the intersection of ownership and management of a company, but how does a...more

Do You Need to Do Business with Your Co-Owner’s Children? It Depends on the Language of Your Agreements.

Owners of closely-held businesses, including family-owned companies, often agree to restrict the owners’ ability to later transfer their ownership interests to third parties. Such restrictions prevent one owner from selling...more

Should a Family Business Owner Make a Charitable Gift of Her S Corporation Stock?

Owners of family businesses are often looking to support charitable causes, while also seeking to obtain the most tax efficient outcome from such donations. Generally, a charitable contribution of appreciated property allows...more

An Oppression How-To: Revoke Employment, Profit Sharing and Control

An earlier post on this blog, examining a post-trial decision in Matter of Digeser v Flach, 2015 NY Slip Op 51609(U) [Sup Ct Albany County Nov. 5, 2015], described the minority shareholder’s dissolution claim under Section...more

Lessons Learned in Selling the Family Business

We have represented hundreds of family businesses (as well as other privately-held businesses) in negotiating and completing successful mergers and acquisitions. We have seen important lessons learned by families selling...more

Success Requires Buy-In From The Incumbent Generation

Last week, we were honored to have Greg Waggoner and Joanna Morrill of Leupold & Stevens, Inc. present to the Family Business Legacy Group. Greg is a representative of the 4th generation and serves on the company’s board of...more

KNOWN UNKNOWNS about Federal Tax Laws and Regulations

The new administration in Washington, supported by Republican majorities in Congress, has pledged substantial changes to federal tax laws and regulations. One change may - or may not - be the complete elimination of federal...more

Watch out for Fraud in Family-Business Purchase Agreements

In business purchase agreements, including agreements between family members, the seller often retains pre-sale liabilities, such as tax liabilities, while the buyer assumes post-closing liabilities related to the business’...more

The Different Roles of Shareholders, Directors and Officers in Family-Owned Businesses

Many family-owned businesses are organized as corporations to protect the owners from personal liability for business obligations. One consequence of organizing as a corporation is the legal separation of ownership and...more

Innovation in Family Business?

The latest from the Harvard Business Review’s ongoing inquiry into family businesses has yielded a surprising result. Research recently published in the Academy of Management Journal indicates that family businesses actually...more

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