Estate Planning for the Family Business Owner
What You Will Learn
Are you planning for the succession of the family business by using the latest techniques to preserve the value of the business and reduce estate taxes?
This annual advanced course of study, comprising more than 19 hours of instruction, provides a comprehensive overview of estate planning techniques for the family business owner. The course covers the life cycle of the closely held business, from choice of entity to estate administration, including the dynamics of dealing with the family, valuations, and getting the business ready to sell, with concentration on tax and estate planning issues, but keeping in mind that there are significant non-tax questions that also require attention. The latest developments out of Congress and the courts are also discussed. New topics included in this year’s program also address charitable contributions, life insurance, and retirement benefits.
The course is intended for lawyers, accountants, and others who advise privately-owned business owners, as well as for the owners and financial officers of such businesses themselves.
Specially featured in this course are optional breakfast workshops on Thursday and Friday. These well-received sessions allow registrants to discuss topics of concern with the faculty in informal small group settings. Hypothetical case studies are used to illustrate points made throughout the program. Time also is reserved to address written questions submitted by the registrants.
Planning Chairs
Steve R. Akers, Bessemer Trust, Dallas
Mark B. Edwards, Poyner & Spruill LLP, Charlotte, North Carolina
Myron Sildon, Sildon Law Group, P.C., Kansas City, Missouri
Faculty
Jean T. Adams, Womble Carlyle Sandridge & Rice, PLLC, Winston-Salem, North Carolina
Susan T. Bart, Sidley Austin LLP, Chicago
Michael V. Bourland, Bourland, Wall & Wenzel, P.C., Fort Worth, Texas
Samuel A. Donaldson, Associate Professor of Law and Director, Graduate Program in Taxation, University of Washington School of Law, Seattle
Eric A. Manterfield, Krieg DeVault LLP, Indianapolis
Mario A. Mata, Cantey Hanger, LLP, Dallas
Carlyn S. McCaffrey, Weil Gotshal & Manges, LLP, New York
Charles L. Ratner, Ernst & Young LLP, Cleveland
Robert P. Schweihs, Managing Director, Willamette Management Associates, Chicago
Lauren J. Wolven, Regional Trust Head, Brown Brothers Harriman Trust Company, N.A., Chicago
ALI-ABA Staff: Amy S. Weinberg, Assistant Director, Office of Courses of Study
Program Schedule
(Times listed are Pacific Time)
WEDNESDAY, JULY 11, 2007
7:30 a.m. Registration and Continental Breakfast
8:30 a.m. Introductory Remarks and Course Overview
8:40 a.m. Estate Planning For the Family Business Owner: A Syllabus – Mr. Edwards
This presentation offers an overview of the topics in the course as the context for learning, explores the relationships between the subjects, and points out areas in which there is conflict among the available choices.
9:40 a.m. Human Issues in Estate Planning for the Family Business Owner– Mss. Bart and Wolven
When planning an estate, professional advisors often become so focused on the technical aspects of the tax laws that they may forget the reasons that, a majority of the time, drive their clients to seek advice. This presentation focuses on some of the issues that urge clients to implement planning, such as retirement, divorce, and family strife, and discusses creative structures to balance thoughtful tax and succession planning with delicate family relationships.
10:40 a.m. Networking Break
10:55 a.m. Effects of Entity Form on the Estate Plan – Professor Donaldson
Traps and planning opportunities for businesses in proprietorship, partnership, LLC, C corporation, or S corporation form
12:00 noon Lunch Break
1:30 p.m. Valuation Issues for the Family Business – Mr. Schweihs
This presentation looks at the unique characteristics of a family business and their effect on company worth; the importance of valuation as part of the problem-solving process; techniques for determining a reasonable value of the family business; recent case law developments regarding valuation adjustments (such as discounts for lack of marketability and control premiums); factors and provisions in documents that affect valuations, including formula price provisions in buy-sell agreements; suggested best practices for family business owners to enhance value; and how attorneys can work best with valuation firms.
2:30 p.m. Buy-Sell Agreements – Mr. Sildon
Planning considerations for creation and implementation of buy-sell agreements, including redemption vs. cross-purchase agreements, triggering events, setting the purchase price, tax considerations, and ethical issues for the family business attorney
3:30 p.m. Networking Break
3:45 p.m. Practical and Creative Uses of Life Insurance for the Closely Held Business Owner; Coordination of the Overall Succession Plan – Mr. Ratner
The real purposes for the family owner to secure insurance and how best to structure the insurance purchase and ownership to achieve those goals; creative uses of life insurance in the family-owned business, and using insurance to fund buy-sell agreements, pay estate taxes, and provide liquidity to non-family employees; practical overview of the succession process from the business owner family’s viewpoint
5:00 p.m. Questions and Answers
5:15 p.m. Adjournment for the Day
THURSDAY, JULY 12, 2007
7:30 a.m. Optional Workshops (not webcast) and Continental Breakfast
Section 529 Plans – Ms. Bart
Effects of Entity Form on the Estate Plan – Professor Donaldson
Life Insurance Planning and Succession Planning Process – Mr. Ratner
8:30 a.m. Charitable Contribution Planning Opportunities – Mr. Bourland
Using sophisticated charitable planning alternatives to address family assets, including family business, estate, and succession planning. Case studies are used to demonstrate the integration of charitable planning techniques, with traditional estate and family business succession planning tools.
9:30 a.m. Current Developments and Hot Topics Update – Mr. Akers
Various current developments, including legislative enactments and proposals, family limited partnership structuring, recent important case law developments, and hot topics with the IRS
10:30 a.m. Networking Break
10:45 a.m. Asset Protection Planning for the Family Business Owner – Mr. Mata
In today’s litigious society, the client’s professional advisors must consider and address the potential risks from litigation to a client’s personal assets and family wealth. This presentation explores the benefits, goals, and issues involved in establishing a domestic or offshore asset protection strategy for the wealthy client, family business owner, or executive with significant business holdings or investments at risk.
The presentation also includes a discussion of the asset protection issues in drafting trusts, FLPs, and FLLCs, and the effect that the Bankruptcy Reform Act of 2005 has had on asset protection and estate planning strategies.
11:45 a.m. Lunch Break
1:15 p.m. Getting the Business Ready To Sell – Mr. Sildon
Why would the family business owner consider selling or merging the business, or an IPO? This presentation discusses how to prepare the company for disposition, including identifying and contacting buyers, confidentiality agreements, and retaining key employees during the negotiations, and the form of the sale agreement.
2:15 p.m. Managing the Trust of the Family Business Owner – Mr. Edwards
The modern trust must comply with the provisions of the Uniform Prudent Investor Act and the (not-so) Uniform Principal and Income Act. Both of these Acts create problems for the family business owner; the problems are explored, with solutions suggested.
3:15 p.m. Networking Break
3:30 p.m. Working with Retirement Benefits in Estate Planning for Family Business Owners – Ms. Adams
Because the income tax consequences of qualified retirement benefits (including IRAs) are governed by a complex and relatively inflexible set of rules, they pose challenges to estate planners. When another unique and illiquid asset – the family business – is thrown into the mix, clients and planners alike may have difficulty recommending an optimal distribution plan at the participant's death. This presentation examines how to order priorities and seek workable solutions in common planning scenarios.
4:30 p.m. Planning and Drafting Estate Planning Documents for Family Business Owners – Mr. Manterfield
Special estate and business planning considerations for the family business owner, including drafting to maximize the benefit of the applicable credit amount, the selection of marital deduction formulae, special trust provisions for owners of S corporations, tax charging clauses, and the selection of trustees
5:30 p.m. Questions and Answers
5:45 p.m. Adjournment for the Day
FRIDAY, JULY 13, 2007
7:30 a.m. Optional Workshops (not webcast) and Continental Breakfast
Asset Protection Planning – Mr. Mata
Implementation of the Plan and Drafting Issues – Mr. Manterfield
Ethics Issues in Dealing with the Family Business Owner Client – Mr. Bourland
8:30 a.m. Advanced Transfer Planning Issues – Ms. McCaffrey
Sophisticated and creative transfer planning strategies (including strategies for maximizing the amount transferred with GRATs, sales, and planning with grantor trusts); defined value clauses; particular problematic issues in dealing with transfers of business interests
10:00 a.m. Networking Break
10:15 a.m. Up-to-Date Tax Planning Considerations in Administering the Estate of the Family Business Owner – Mr. Akers
Various tax planning issues in administering the estate of the family business owner, including income, gift, estate, and generation-skipping transfer taxes; alternative methods of paying estate taxes; summary of a wide variety of tax savings strategies for the family business owner’s estate
11:45 a.m. Questions and Answers
12:00 noon Adjournment
Total 60-minute hours of instruction: 19.25
Suggested Prerequisite: Limited experience in legal or business practice in subject matter or completion of Basic CLE Course in subject matter
Educational Objective: Acquisition of knowledge and skills to develop proficiency as a practitioner; maintenance of professional competence as a practitioner; provision of information on recent legal developments
Level of Instruction: Advanced
Here's what registrants have said about this course:
Excellent seminar and the materials are fantastic; it’s great to be able to utilize the materials in day to day application. Speakers were great; refreshing to go to a course where the presenters do not read from materials/slides. The respect for time constraints was also refreshing.
I thought that all of the presenters were very experienced and knowledgeable.
This course was excellent, with selected topics and excellent presentations and materials. I will attend again.
The sharing of ideas and [use of a] case study was perfect.
The faculty was knowledgeable, approachable and interesting – a really great seminar.
