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, 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.
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.
Planning Chairs
(also on faculty)
Steve R. Akers, Bessemer Trust, Dallas, Texas
Mark B. Edwards, Poyner & Spruill LLP, Charlotte, North Carolina
Myron E. Sildon, Sildon Law Group, P.C., Kansas City, Missouri
Faculty
Charleen Alderfer, Family Therapy Group, College of New Jersey, Ewing, New Jersey
Clayton P. Alderfer, Alderfer & Associates, Belle Mead, New Jersey
Michael V. Bourland, Bourland, Wall & Wenzel, P.C., Fort Worth, Texas
Samuel A. Donaldson, Associate Professor of Law, University of Washington School of Law, Seattle, Washington
Eric A. Manterfield, Krieg DeVault LLP, Noblesville, Indiana
Charles L. Ratner, Ernst & Young LLP, Cleveland, Ohio
Elizabeth M. Schurig, Giordani Schurig Beckett & Tackett, LLP, Austin, Texas
Marjorie J. Stephens, Law Offices of Marjorie J. Stephens, Dallas, Texas
John J. Sudol, Director, Business Valuations, RSM McGladrey, Inc., Charlotte, NC
ALI-ABA Staff: Kevin J. O'Connor, Senior Assistant Director, Office of Courses of Study
Note: The discussions include at least one full hour on ethics and professional responsibility issues, accepted as such by most, but not all, MCLE jurisdictions. A second, dedicated hour on ethics and professional responsibility issues is available as a workshop.
Program Schedule
WEDNESDAY, JULY 9, 2008
7:30 a.m. Registration and Continental Breakfast
Webcast Segment A
8:30 a.m. Introductory Remarks and Course Overview
8:40 a.m. Ways Family Businesses Survive Families - Doctors Alderfer
How family structure affects the organization; how the relationship between family and non-family members affect the business; why family businesses promote under-qualified people to key positions; why substance abuse by family members occurs in family businesses; how to encourage productive conversations across generations of leadership in the firm
9:40 a.m. Income and Transfer tax Aspects of the Entity Form, Part 1 - Professor Donaldson
We can't change the type of business that comes in the door with the client, but we can better understand how each type works and how to vary our strategies depending on the form of the client's business. This session will recap the basic income, estate, and gift tax aspects of the major forms of business, with an emphasis on C corporations.
10:45 a.m. Networking Break
11:00 a.m. Now You See It; Now You Don't: Estate Planning and Client Capacity - Mr. Edwards
Underlying all estate planning is a determination that the client has the requisite mental capacity to execute the plan. This presentation will examine the concept of capacity, how to determine if it is impaired, what ethical obligations arise if impairment exists, how to obtain and utilize professional assistance, and what remedial techniques are available if capacity is lost.
12:00 noon Lunch Break
Webcast Segment B
1:30 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.
2:30 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.
3:45 p.m. Networking Break
4:00 p.m. Valuation Issues for the Family Business - Mr. Sudol
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); 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 best work with valuation firms.
5:00 p.m. Questions and Answers
5:15 p.m. Adjournment for the Day
THURSDAY, JULY 10, 2008
7:30 a.m. Workshops and Continental Breakfast
• Human Issues - Doctors Alderfer
• Life Insurance Planning and Succession Planning Process - Mr. Ratner
• Valuation Issues - Mr. Sudol
Webcast Segment C
8:30 a.m. Current Developments and Hot Topics Update - Mr. Akers
Various current developments, including the legislative developments, family limited partnership structuring, recent important case law developments, and hot topics with the IRS.
9:30 a.m. Income and Transfer Tax Aspects of the Entity Form, Part 2 - Professor Donaldson
This session continues the exploration of the basic income, estate, and gift tax aspects of the major forms of business, with an emphasis on S corporations and entities taxed as partnerships.
10:30 a.m. Networking Break
10:45 a.m. Charitable Contribution Planning Opportunities - Mr. Bourland
Sophisticated charitable planning alternatives to address family asset, including family business, estate and succession planning; one or more case studies will be used to demonstrate the integration of charitable planning techniques, with traditional estate and family business succession planning tools.
11:45 a.m. Lunch Break
Webcast Segment D
1:15 p.m. The Place of the Gift Tax in an Estate-Tax Dominated World - Mr. Edwards
The inter vivos gift is (or should be) the cornerstone of estate planning. Yet it is often regarded as a "poor cousin" to more exotic techniques. This presentation will examine the basic rules of inter vivos giving and then venture down the road less traveled to items such as upstream giving, sideways giving, gifts to spouse not qualifying for the marital deduction, Crummey powers, gifts for education and medical expenses, incomplete gifts, grantor trusts, etc. It will also examine basis and compliance issues, and special challenges that arise when the subject of the gift is an interest in a family owned business.
2:15 p.m. Advanced Transfer Planning Issues - Ms. Stephens
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.
3:15 p.m. Networking Break
3:30 p.m. Asset Protection Planning for the Family Business Owner - Ms. Schurig
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 2005 Bankruptcy Reform Act will have on asset protection and estate planning strategies.
4:30 p.m. Dealing with Issues in the Family Business Concerning Divorce and Non - "Traditional" Family Relationships - Mr. Sildon
Divorce and relationships such as non-traditional marriage can cause particular havoc in the family business. This presentation will address some of the issues and examine planning techniques to address such issues. Ethical issues for the advisor also will be reviewed.
5:30 p.m. Questions and Answers
5:45 p.m. Adjournment for the Day
FRIDAY, JULY 11, 2008
7:30 a.m. Workshops and Continental Breakfast
• Asset Protection Planning - Ms. Schurig
• Transfer Planning - Ms. Stephens
• Ethics Issues in Dealing With the Family Business Owner Client - Mr. Bourland
Webcast Segment E
8:30 a.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.
9:15 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.
10:15 a.m. Networking Break
10:30 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: including the workshops: 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:
"This is one of the most stimulating and informative ALI-ABA programs I've ever attended. All of the speakers were both highly knowledgeable and excellent communicators. Bravo!" -- Lee F. Mercier
"This is a great course, and I will encourage my colleagues to attend future sessions. The scope of topics and quality of speakers fits very well with planners who work frequently with family business owners."
"The speakers were excellent addressed the subject matter in time allowed at the right level of sophistication."
"Written materials were excellent. Appreciates the initial fact pattern set-up and each presenter's reference to the fact pattern, very helpful."
