Planning for the Death of the Majority Shareholder

Author: Klaralee R. Charlton

The death of the majority shareholder or partner in an entity presents its own challenges in estate planning and administration. In this presentation practitioners will learn how entity ownership passes upon the death of the owner and the estate tax and income tax considerations that must be analyzed before and after the death. Participants will also learn how to establish control over the entity when the managing owner passes away and options for transferring, liquidating, or continuing the entity after death.

Publication Date: August 2020

Designed For
Attorneys, CPAs, and Enrolled Agents.

Topics Covered

• Description of types of entities and their ownership and management structures
• How to regain control of entity at death or disability of managing owner
• Examples of common transfer restrictions placed on ownership interests
• Common considerations when reporting business interests for estate tax purposes
• Review of the basis adjustment rules relating to entity ownership interests
• Illustration of the benefits achieved by making a 754 election for a partnership
• Analysis of how business owners can plan for their death to streamline the transition process

Learning Objectives

• Describe the importance of planning for the death of a managing shareholder or partner
• Identify the basis adjustment differences between partnerships and corporations
• Identify transfer restriction provisions and how to accomplish transfers upon death
• Recognize and analyze the tax savings that can be achieved by adjusting the tax basis at death
• Recognize how to recommend estate planning techniques to streamline the transfer of control at death

Level
Basic

Instructional Method
Self-Study

NASBA Field of Study
Taxes (2 hours)

Program Prerequisites
None

Advance Preparation
None