CE Type: CLE, CPE, SHRM Education Level: For All Levels
This session will discuss several innovative estate planning strategies that are available to business owners who are undergoing an ESOP transaction. We will also review the distinctive planning opportunities stemming from three different circumstances: 1) the capital gains tax deferral offered by Internal Revenue Code section 1042; 2) the unique effect that a partial ESOP transaction can have on the value of retained stock ownership; and 3) the structure and potential transfer of the proceeds received after the sale of a company to an ESOP. For example, some of the opportunities that arise from these circumstances include: • Transferring retained ownership to a family limited partnership (FLP) or limited liability corporation (LLC) at a valuation discount • A step-up in basis, achievable through investment in QRP with a Section 1042 tax deferral • Philanthropic planning (including with QRP) • Transfer techniques that can be used in conjunction with seller notes and warrants • And more
Learning Objectives:
Understand how to use innovative strategies to incorporate estate planning into a business owner's ESOP transaction, and how different strategies can be used to attain different goals (family legacy, tax mitigation, charitable donations).
Analyze the different types of trusts and entities (GRAT, CRT, IDGT, etc.) and the pros and cons of each in regards to estate planning with an ESOP transaction.
Review the use of warrants in ESOP transactions and the different estate planning strategies available, and define how philanthropic goals can be met while also working to maximize estate and tax planning efficiency.
