Tax and Estates
Tax and Estates
A local food distribution company retained our firm to help it plan for the transition in ownership and management from one generation to another. The business had been founded many years ago by the father of the current owner, and the current owner, who is in his mid-60s, had brought one of his two children into the business. The father wanted to pass on the business in equal shares to his two children, but he wanted to reward the efforts of the child who was active in the business.In addition to preparing wills, trusts, living wills and powers of attorney for the current owner of the business and his spouse, our firm also recapitalized the business so that there was both common and preferred stock, and it developed a plan under which the current owner began to transfer common stock to his child who was active in the business and preferred stock to his child who was not active in the business. This began the transition of the business ownership to the younger generation (and "froze" the estate size of the current owner), and it guaranteed that the son in the business would be able to assume management of the business without interference by his sibling and also that the future growth in value of the business (which would be reflected in the common stock) would inure to the benefit of the son who is actually running and building the business.