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 22 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 getting the business ready to sell, with primary attention to tax and estate planning issues, but keeping in mind that there are significant non-tax questions that require attention.
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. 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. Time is reserved throughout the program to address registrants' written questions.
Planning Chairs
Steve R. Akers, Managing Director, Bessemer Trust, Dallas, Texas
Myron E. Sildon, Sildon Law Group, P.C., Kansas City, Missouri
Faculty
Michael V. Bourland, Bourland, Wall & Wenzel, P.C., Fort Worth, Texas
Mark B. Edwards, Poyner & Spruill LLP, Charlotte, North Carolina
C. Wells Hall, III, Mayer, Brown, Rowe & Maw, Charlotte, North Carolina
Dr. Fredda Herz Brown, Metropolitan Group, LLC, Cresskill, New Jersey
Dr. Susan M. Mangiero, BVA, LLC, Trumbull, Connecticut
Eric A. Manterfield, Krieg DeVault LLP, Indianapolis, Indiana
Mario A. Mata, Cantey & Hanger, LLP, Dallas, Texas
Charles L. Ratner, Ernst & Young LLP, Cleveland, Ohio
Richard B. Robinson, Robinson and Diss P.C., Denver, Colorado
Kathleen R. Sherby, Bryan Cave LLP, St. Louis, Missouri
Program Schedule
Wednesday, July 13, 2005
- 7:30 a.m. Registration and Continental Breakfast
- 8:30 a.m. Introductory Remarks and Course Overview
- 8:40 a.m. Overview of Succession Planning and Estate Planning Process for the Family Business Owner – Mr. Edwards
- Overview of succession planning format; overview of tools to deal with dividing the family business (and with sibling conflicts that may arise), including valuation issues, special considerations for gifts of business interests, S corporation issues, installment sales, SCINs, private annuities, stock redemptions, split-offs, and dealing with the human issues that arise in using these techniques with the family business; ethical issues for business owner advisors
- 9:45 a.m. Understanding the Dynamics of Family Enterprises – Dr. Herz Brown
- Sharing assets with those with whom one shares strong emotions demands a unique set of knowledge and skills. Serving as advisors to these families demands an understanding of their complexities and our own. This presentation provides a framework for understanding these families and the way that "help" can be provided.
- 10:45 a.m. Networking Break
- 11:00 a.m. Choice of Entity and Use of Single Member Entities – Mr. Hall
- Selection of entity considerations, including a review of tax and state law issues impacting selection considerations for C corporations, S corporations, partnerships, LLCs, and the use and operation of disregarded entities such as Qsubs and single member limited liability companies
- 12:00 noon Questions and Answers
- 12:15 p.m. Lunch Break
- 1:45 p.m. Getting Money Out of the Business in Light of the "15% Solution" – Mr. Robinson
- A paradigm shift for planning in light of the 15% tax on dividends and capital gains
- 2:45 p.m. Buy-Sell Agreements – Mr. Manterfield
- 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
- 3:45 p.m. Networking Break
- 4:00 p.m. The Bottom Line – Cash Flow for the Owner and the Owner’s Family: Getting Dollars Out of the Business and to the Owner, Including Planning for Pass-Through Entities – Mr. Ratner (Moderator) and Messrs. Hall and Robinson
- Income tax treatment effects of pass-through entities, including formation of the entity; ongoing "feeding and caring" for the entity; strategies for pulling money out of the business under a variety of strategies, including sales, redemptions, entity liquidations, and under buy-sell agreements; eventual dissolution or liquidation of the business; supplying cash flow with passive investments
- 5:15 p.m. Questions and Answers
- 5:30 p.m. Adjournment for the Day
Thursday, July 14, 2005
- 7:30 a.m. Optional Workshops and Continental Breakfast
- Psychology of the Family Business – Dr. Herz Brown
- Selection of Entity Issues – Mr. Hall
- Getting Money Out of the Business in Light of the "15% Solution" – Mr. Robinson
- 8:30 a.m. Dealing with the Special Issues Related to Divorce in the Family Business Environment – Mr. Sildon
- Divorce can cause particular havoc in the family business, and tax planning techniques to address divorce issues in the family business are examined. Ethical issues also are reviewed.
- 9:30 a.m. Practical and Creative Uses of Life Insurance for the Closely Held Business Owner – Mr. Ratner
- The real purposes for the family owner to need 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, including split-dollar insurance (and recent developments) and insurance to fund buy-sell agreements, pay estate taxes, and provide liquidity to non-family employees
- 10:30 a.m. Networking Break
- 10:45 a.m. Valuation Issues for the Family Business – Dr. Mangiero
- This presentation looks at the unique characteristics of a family business and their impact 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 development regarding valuation adjustments (such as discounts for lack of marketability and control premiums); and suggested best practices for family business owners to enhance value.
- 11:45 a.m. Questions and Answers
- 12:00 noon Lunch Break
- 1:30 p.m. Implementation and Documentation of the Succession Plan – Mr. Bourland
- This presentation offers a review of planning and implementation/documentation of various options to pass on the family business. The discussion covers effective use of the family business mission statement, non-competition agreements, entity choices, IRC 355 actions, employment agreements (including non-family employee deferred benefit agreements), and the ethical issues facing the lawyer who works with the family in the succession process.
- 2:30 p.m. Advanced Transfer Planning Issues – Mr. Akers and Ms. Sherby
- Family limited partnership planning issues; sophisticated and creative transfer planning strategies (including strategies for maximizing the amount transferred with GRATs and planning with grantor trusts); defined value clauses
- 3:30 p.m. Networking Break
- 3:45 p.m. Advanced Transfer Planning Issues (continued)
- 4:15 p.m. Hot Topics Update – Mr. Akers (Moderator), Mr. Bourland, and Ms. Sherby
- The panel addresses various current developments, including the Strangi (family limited partnership) and McCord (defined value clause) cases and the wide reaching potential impact of Circular 230 on attorneys’ practices.
- 5:15 p.m. Questions and Answers
- 5:30 p.m. Adjournment for the Day
Friday, July 15, 2005
- 7:30 a.m. Optional Workshops and Continental Breakfast
- Life Insurance Planning – Mr. Ratner
- Transfer Planning – Ms. Sherby
- Implementation of the Plan and FLP Planning – Mr. Bourland
- Valuation Issues for the Family Business – Dr. Mangiero
- 8:30 a.m. Through the Looking Glass: Thoughts on the Future of Estate Planning – Mr. Edwards
- We do live in interesting times! Forces of tax reform, demographics, investment climate, and anxiety are converging to create a new form of estate planning that will govern our success as professionals in the next twenty years. (And these same trends will have much to do with the type of retirement we can expect thereafter!) We examine these factors and what they portend, especially as they impact our planning for the family business. We also examine ethical issues that arise in the process.
- 9:30 a.m. Family Office Issues – Mr. Edwards
- When working with the family business, the planner often encounters a "family office." What is this animal? What is its function and how is it structured? How does it help (or hinder) the planner's work? These and other issues are briefly examined in the context of the estate planning engagement.
- 9:45 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 family LLCs and limited partnerships and the effect that pending bankruptcy law reform will have on asset protection planning.
- 10:45 a.m. Networking Break
- 11:00 a.m. Getting the Business Ready To Sell – Mr. Sildon
- Why would the family business owner consider selling or merging the business, or an IPO? The 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.
- 12:00 noon Lunch Break
- 1:30 p.m. Succession Planning Wrap-Up: Drafting Estate Planning Documents for the Family Business Owner – 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
- 3:00 p.m. Networking Break
- 3:15 p.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
- 4:45 p.m. Questions and Answers
- 5:00 p.m. Adjournment
Total 60-minute hours of instruction: 22.5
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:
Easily the best program I have attended in 40 years in concept, content, and speakers.
Excellent/nice balance between technical and non-technical, practical and philosophical, too hard (sketchy) and just right (comforting.)
The materials are so complete – well worth the price of the course. Such a valuable resource!
Sildon was my favorite because he is absolutely brilliant, but so useful and user friendly in his outlines and presentations. Akers – perfect, very helpful, great presentations and moderating.
You really know how to put on a conference. The family business owner program was outstanding.
