Tax-favored planning for ownership succession via ESOPs

Article Abstract:

An employee stock ownership plan (ESOP) is an attractive way to transfer ownership of a closely held family owned business because the stock is sold at a tax-deferred basis, the contributions are deductible and income is tax exempt. ESOPs are encouraged through major tax incentives that can benefit owners including a tax free rollover of funds from stock sales to the ESOP. Therefore, owners could sell up to 49% of their stock to the ESOP on a tax-free basis while retaining control of the corporation that could be transferred to children and avoiding extensive estate taxes.

Transfer taxes, Employee stock ownership plans

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Handling the nontax issues in business succession planning

Article Abstract:

Management and ownership transitions in family-owned businesses can be more successful if planned for in advance. Interpersonal, financial, and inheritance issues can create complexities and problems against which planners can guard. A formal succession plan should be drafted which takes into account future contingencies such as divorce, death, and minority shareholder rights. Encouraging formality in family business dealings is an important method for cohesion and compromise.

Estate planning

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Family business planning that accomplishes the owner's goals

Article Abstract:

Estate planning strategies for family businesses and ownership succession are outlined. The alternatives of liquidating the business, selling the business, continuing the business as a family enterprise, and the buy-sell approach are evaluated.

United States

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