Family Businesses

News & Analysis as of

Potential Limitations on Gift Tax Strategies Coming Soon

Valuation discounts have been a significant component of estate planning for many years. By contributing assets to a family entity and gifting or selling an interest in the entity to family members, you can effectively...more

Domestic Partnership Agreements: Financial Disclosures and Privacy

To reduce risk of later attack on the domestic partnership agreement, domestic partners should make fair and reasonable financial disclosures to each other prior to signing the agreement. Each partner should disclose to the...more

IRS Plans to Further Restrict Family Business Valuation Discounts

IRS regulations anticipated for release as early as this September may further restrict valuation discounts. The exact scope of the regulations is unknown, but the regulations will likely make it more difficult for taxpayers...more

Proposed Regulations May Limit Valuation Discounts for Family-Owned Entities

Individuals who wish to make gifts or other transfers of interests in family-owned/controlled entities, such as closely-held businesses, limited partnerships, or limited liability companies should consider making such...more

New Regulations Expected this Fall May Limit Valuation Discounts in Certain Asset Transfers

For high-net worth individuals – particularly those whose assets include closely-held business interests or family investment entities – anticipated changes in the valuation of those assets for estate and gift tax purposes...more

Best in Law: IRS Moves Mean It's Time to Shift Family Entity Wealth

The IRS may take action very soon to eliminate or reduce a widely used and valuable family business entity wealth transfer strategy. The window of opportunity to take advantage of this strategy may close within the next month...more

ERISA: Clarity on When ERISA Applies to Working Owners of Small Companies

You probably already know that in small, wholly owned “mom and pop” businesses, benefits covering only the owners of the business may be exempt from ERISA....more

Anticipated IRS Regulations May Impact Discounts On Intra-Family Transfers of Closely Held Business Interests

Action Item: It is anticipated that Treasury will soon issue new regulations that will affect the valuation discounts applicable to intra-family transfers of interests in closely held entities. It may be advisable to review...more

The Time to Transfer Entity Interests Is Now - Trust and Estates Update Vol. 2015, Issue 1

Upcoming IRS regulations may significantly limit and reduce planning opportunities to transfer minority interests in closely held entities to family members and increase the transfer tax cost associated with moving such...more

Hot Topics from the Attorneys for Family Held Enterprises Conference

On June 17, the Attorneys for Family Held Enterprises (AFHE) held a midyear conference in New York City. The agenda began with an interactive presentation titled "Understanding Conflicts of Interest and Current Events in the...more

The Pressure of Stepping into the Family Business

First and second generation family business owners spend an inordinate amount of time focused on building and preserving their family legacy. This is hard, hard work. For starters, it means not only growing the business and...more

Family Office Direct Investing in Private Equity Deals

For most family offices, engaging in direct investment PE deals really means finding the right partner, and the diligence required to find the right PE partner for direct deals is much more involved, and probably less of a...more

Possible Regulatory Changes Could Reduce Tax Benefits of Transfers of Interests in Family-Owned Entities

Historically, the Internal Revenue Service has closely scrutinized transfers between family members of interests in family-owned entities. Among other actions, the Service has sought to curtail the use of discounts to...more

Premarital planning - Protecting your assets without a prenup

Protecting family assets in the event of a divorce is particularly significant for family business owners, who typically want to avoid sharing ownership with their ex-spouses or their children’s ex-spouses. A prenuptial...more

Recent Cases of Interest to Fiduciaries

In re Estate of House, 2014 Wash. App. LEXIS 3006 (Wash. Ct. App. 2014) - A release waiving any and all claims that the parties may have or may acquire, bars recovery for unknown claims existing at the time the release...more

Delaware Court Rejects Entire Fairness Standard in Cablevision Compensation Fight

Vice Chancellor John W. Noble, of the Delaware Chancery Court, last month refused a shareholder’s attempt to second guess Cablevision’s independent compensation committee’s decision to award the company’s founder and...more

New Treasury Regulations May Limit Transfer Tax Savings

Recent comments by Cathy Hughes, an Estate and Gift Tax Attorney Advisor in the Office of Tax Policy at the U.S. Treasury Department, indicated that the department may issue proposed regulations as early as September 2015...more

Family Limited Partnerships: Are Discounts Disappearing?

“Family limited partnerships” – that is, family investment entities usually structured as LLCs or limited partnerships – have been a popular estate planning technique for years. Generally speaking, a client can transfer...more

Valuation Discounts at Risk

Yogi Berra used to say, “A nickel ain’t worth a dime anymore.” But a dime may be worth a nickel ... at least for the time being. Valuing interests in family-controlled entities is a challenging process, and an area where...more

Selling the Business to Divide the Assets, Part 2

This is Part 2 of my discussion of a third alternative for answering the question: When a closely-held business is a valuable marital asset, how can its value be turned into cash? Part 1 discussed the main pros and cons of...more

Closely-Held Shareholder Derivative Actions are Alive and Well in Texas

After 30 years of running his family-owned business, Hillbilly Oil Co., Jed Clampett decided to retire in 2013. The board of directors elects Jethro Bodine as Hillbilly’s President and Elly May as Vice President. Both Jethro...more

Trustees Beware: Which Fiduciary Standard Applies to Your “Business Judgments”?

To what legal standard must a trustee adhere when he or she also participates in the control of a family or closely held business? Courts continue to grapple with this question. The high courts in both Georgia and Nebraska...more

The Family Buyout: Tips for Success

In the life cycle of a family business, one common event is the purchase by one or several family members of the interests in the business held by other family members. Because of the family relationships inherent in such...more

Tips For Successful Succession Planning

“Give me six hours to chop down a tree and I will spend the first four sharpening the axe.” ? Abraham Lincoln - Your company is built to last. But when you are ready to step back and let go of the reins, will the next...more

Estate tax relief for family businesses

If a substantial portion of a person’s wealth is tied up in a family or closely held business, he or she may be concerned that the estate will lack sufficient liquid assets to pay estate taxes. If that’s the case, heirs may...more

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