ESOP Estate Tax Bill Passed

Congress sometimes passes legislation that appears to be general in scope, but really is meant mostly for a single company. In this case, Congress passed as part of the Act a provision allowing an ESOP to act as a charitable trust for an estate, provided the plan was in existence August 1, 1996, the decedent and members of the decedent's family own not more than 10% of the value of the company stock, and the ESOP owns at least 60% of the stock after the transfer. There were additional restrictions as well, including full voting rights for participants and an independent trustee. The provision was initiated by the Sammons Enterprises, Inc., a Texas-based company with an ESOP.