Attorneys
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Clients who have developed closely held family businesses
are frequently concerned about ensuring the survival and economic
health of the business when the older generation management is no
longer involved. In addition, the continuing viability of such a
business may be jeopardized if the death of an owner compels the
liquidation of the business to pay estate taxes.
Where appropriate, we recommend to clients the use
of family limited partnerships and limited liability companies.
These two entities offer a means by which to make gift transfers
at a significantly reduced tax cost, while avoiding the restrictions
associated with the use of a trust to maintain management control.
In order to ensure the orderly succession of ownership in
a closely-held business to the other family or non-family owners
of the business, we also prepare funded and unfunded redemption
and buy-sell agreements to establish a method for the purchase of
the client's shares and funding the purchase price. Such an agreement
can avoid disputes concerning the price of his or her interest and
can avoid the demand of a deceased owner's beneficiaries to participate
in the management and profits of the business.
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