Your Closely Held or Family Business

If you own a significant interest in a closely-held or family business or farming operation, your business and estate planning should go hand in hand. Most often, a successful closely held business constitutes a substantial portion of the owner's estate.

It is important that consideration be given to the method of passing the business on to future generations, as well as which family members are capable of managing the future affairs of the business. Quite often it is obvious that one child will be interested and capable of participating in the future of the business, while others will not. Proper planning will not only assure you an orderly shift in control of the business, but may provide significant tax savings to you and to your family.

Decisions requiring the assistance of a knowledgeable and experienced estate planning attorney include:

1. Should the business be operated as a corporation, partnership or sole proprietorship?
2. What estate tax planning benefits can be derived from the use of "special use" valuation under the tax laws?
3. If a corporation or partnership, to what extent can a shareholder or buy-sell agreement be utilized to keep the business in the family and to save estate taxes?

Obviously, the inclusion of business considerations in your overall estate plan will necessitate the advice of professionals competent in not only estate planning, but also business and tax law as well. In any event, a closely held and/or family business presents unusual and extremely advantageous estate and financial planning opportunities that should be addressed.

Starting a Business?

Get a Taxpayer Employer Identification Number (EIN) from the Internal Revenue Service. This is a nine-digit identification number that your business must obtain if it will pay wages to one or more employees or file pension or excise tax returns. It is like a social security number for a business. It is used when filing a federal tax return, as well as in correspondence with the IRS or Social Security Administration.

Use Form SS-4 to apply for an EIN. You can apply by mail or over the telephone. The IRS toll free telephone number to call to apply is (866) 816-2065. Please contact us if we can be of assistance in planning or starting your business.