Case Studies

A Sound and Sensible Business Transfer


Business owners were facing major challenges in transferring valuable businesses to the next generation, and they needed to avoid significant estate taxes and liquidity issues upon their deaths.  Moss & Barnett successfully transferred the enterprises without incurring any estate or gift taxes by using the following techniques: 

(1) converting the stock in the enterprises to voting and nonvoting stock;

(2) gifting a portion of the nonvoting stock to special trusts designed to reduce income taxes and provide protection for the benefit of the second generation; 

(3) selling a portion of the nonvoting stock to a specially designed trust that resulted in no income taxes payable on the gain resulting from the sale; and

(4) using significant discounts for lack of control and lack of marketability.