ESOPS and Estate Planning

This session will review the estate planning opportunities that are available to business owners who are undergoing an ESOP transaction. These opportunities stem from 1) the capital gains tax deferral offered by Internal Revenue Code section 1042; 2) the unique effect of an ESOP on the value of retained stock ownership; and 3) the structure of the proceeds received after the sale of a company to an ESOP. Some of the opportunities that arise from these circumstances include: 

• A step up in basis, achievable through investment in QRP 

• Transferring retained ownership to a family limited partnership (FLP) or limited liability corporation (LLC) at a valuation discount 

• Philanthropic planning with QRP 

• Transfer techniques that can be used in conjunction with seller notes and warrants 

 Learning Objectives: 

1) Attendees will understand the circumstances of a 1042/ESOP transaction that give rise to unique estate planning opportunities. 

2) Attendees will understand the different estate planning opportunities afforded by the circumstances referenced above. 

3) Attendees will understand the importance of interdisciplinary planning throughout the ESOP transaction period.