Estate Planning for the Family Business Owner - CLE, Continuing Legal Education - ALI
Estate Planning for the Family Business Owner
  • Cosponsored by
    ABA Section of Real Property, Probate and Trust Law
    ABA Section of Taxation
  • Wednesday-Friday
  • July 19-21, 2006
  • Swissotel Chicago
  • Chicago, IL
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Available Online: | MP3 Audio Files | Coursebook

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 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 the dynamics of dealing with the family, valuations, and 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 also require attention.

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.

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Planning Chairs

Steve R. Akers, Managing Director, Bessemer Trust, Dallas

Mark B. Edwards, Poyner & Spruill LLP, Charlotte, North Carolina

Myron E. Sildon, Sildon Law Group, P.C., Kansas City, Missour

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Farhad Aghdami,Williams Mullen, Richmond, Virginia

Michael D. Allen, Dobbs–Allen–Lottmann, P.C., Tyler, Texas

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

Curtis R. Kimball, Willamette Management Associates, Atlanta

Eric A. Manterfield, Krieg DeVault LLP, Indianapolis

Mario A. Mata, Cantey & Hanger, L.L.P., Dallas

Timothy J. Meinhart, Willamette Management Associates, Chicago

Charles L. Ratner, Ernst & Young LLP, Cleveland

Richard B. Robinson, Robinson and Diss P.C., Denver

Kathleen R. Sherby, Bryan Cave LLP, St. Louis

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Program Schedule

Wednesday, July 19, 2006

  • 7:30 a.m. Registration and Continental Breakfast
  • 8:30 a.m. Introductory Remarks
  • 8:40 a.m. Course Overview – Mr. Edwards
  • 8:55 a.m. Process for Motivating the Business Owner To Act, with Emphasis on the Human Issues in Estate Planning for the Family Business Owner – Mr. Allen
  • Practical suggestions on how to motivate the owner to prepare a succession plan; affirming owner’s history and succession perspective; assuring owner’s ongoing control and financial security; emphasizing participation, family’s strengths, and new possibilities; dealing with family conflict situations
  • 9:55 a.m. Networking Break
  • 10:10 a.m. Creating and Operating the LLC or Partnership While Navigating Subchapter K – Professor Donaldson
  • Federal income tax aspects of forming, operating, and liquidating an LLC or partnership; the presentation examines income tax issues that often are overlooked and suggests possible strategies to address them
  • 11:10 a.m. Creating and Operating Corporations While Navigating the Tax Rules for "C" and "S" Corporations – Mr. Robinson
  • Federal income tax aspects of forming, operating, and liquidating "C" and "S" corporations, including the paradigm shift for planning in light of the 15% tax on dividends and capital gains
  • 12:10 p.m. Lunch Break
  • 1:40 p.m. Fringe Benefit Planning: Accumulation and Payments – Ms. Sherby
  • Brief overview of fringe benefit planning that can enhance the accumulation of wealth for the business owner; planning for the use of those benefits accumulated during life and tax effective strategies in designating beneficiaries upon death to complement the owner’s estate planning objectives
  • 2:40 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); Professor Donaldson, Mr. Robinson, and Ms. Sherby
  • Strategies for pulling money out of the business under a variety of strategies, including compensation, fringe benefits, sales, redemptions, entity liquidations, and buy-sell agreements; eventual dissolution or liquidation of the business; supplying cash flow with passive investments
  • 4:00 p.m. Networking Break
  • 4:15 p.m. Valuation Issues for the Family Business – Messrs. Kimball and Meinhart
  • 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 development regarding valuation adjustments (such as discounts for lack of marketability and control premiums); suggested best practices for family business owners to enhance value
  • 5:15 p.m. Adjournment for the Day

Thursday, July 20, 2006

  • 7:30 a.m. Optional Workshops and Continental Breakfast
  • * Process for Motivating the Business Owner To Act, with Emphasis on the Human Issues in Estate Planning for the Family Business Owner – Mr. Allen
  • * Family Business Valuation Issues – Messrs. Kimball and Meinhart
  • * Choice of Entity and Operational Issues – Professor Donaldson and Mr. Robinson
  • 8:30 a.m. Dealing with the Special Issues Related to Divorce in the Family Business – Mr. Sildon
  • Divorce can cause particular havoc in the family business. Tax planning techniques to address divorce issues in the family business, as well as ethical concerns, are examined.
  • 9:30 a.m. Practical and Creative Uses of Life Insurance for the Closely Held Business Owner – Mr. Ratner
  • Identifying the family business owner's real needs for insurance and assessing how best to structure the insurance purchase and ownership to meet those needs; 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. 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
  • 11:45 a.m. Buy-Sell Agreements: Different Practical Provisions To Address Unique Issues – Mr. Sildon
  • Additional approaches and provisions to address unique family issues in buy-sell agreements
  • 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.
  • 3:00 p.m. Networking Break
  • 3:15 p.m. Advanced Transfer Planning Issues – Mr. Aghdami
  • 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
  • 4:15 p.m. Hot Topics Update – Messrs. Aghdami and Akers
  • The panel addresses various current developments, including legislative developments, family limited partnership structuring, recent important case law developments, and the wide reaching potential impact of Circular 230 on attorneys’ practices.
  • 5:15 p.m. Adjournment for the Day

Friday, July 21, 2006

  • 7:30 a.m. Optional Workshops and Continental Breakfast
  • * Life Insurance Planning – Mr. Ratner
  • * Retirement Planning Solutions – Ms. Sherby
  • * Implementation of the Plan and FLP Planning – Messrs. Bourland and Manterfield
  • 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 affect our planning for the family business. We also examine ethical issues that arise in the process.
  • 9:30 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 FLPs and FLLCs and the effect that the Bankruptcy Act of 2005 will have on asset protection and estate planning strategies.
  • 10:30 a.m. Networking Break
  • 10:45 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 examined in the context of the estate planning engagement.
  • 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? 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.
  • 2:15 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
  • 3:15 p.m. Networking Break
  • 3:30 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
  • 5:00 p.m. Adjournment

Total 60-minute hours of instruction: 22

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

Click Here for MCLE Credit Information

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Here's what registrants have said about this course:

I have attended this course several times and find it to be the best I have ever attended. The quality and dedication of the faculty never fails to send me back to my office energized and excited to meet with my clients and help them achieve their goals. The breadth of coverage is excellent.

The program was excellent – topical, authoritative, and understandable.

Excellent program! Presenters are at top of their fields of expertise.

The presenters were top-notch. I learned a lot and would recommend this course to any estate planner.

The materials were excellent, as were the presenters. This has been the most useful course I have ever attended. It is worth every penny. Blows [other seminars] out of the water.

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