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Sep 1, 2007 12:00 PM
Insurance LLC Helps Business Owners
Owners of closely held businesses have long sought ways to buy the interest of an owner who dies. They also have sought ways to enjoy the business' success financially while avoiding estate tax upon their death. A new private letter ruling obtained for my client (at press time, it had yet to be assigned a number) approves a creative life insurance funding mechanism to fund the purchase and continues to facilitate the use of trusts to obtain these estate-planning goals. This is the first time that the Internal Revenue Service has rules on such a premium-splitting technique.
Owners of closely held business typically use one or both of two basic approaches to buy a deceased owner's business interest. In a redemption, the business entity buys the deceased owner's business interest; in a cross-purchase, the remaining owners buy it.
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Topics of Interest
| Estate Tax | Donor Advised Funds |
| GSTs | Family Offices |
| Private Foundations | Life Insurance |
| 2010 Tax Act News | Industry Trends Surveys |
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Topics of Interest
| Estate Tax | Donor Advised Funds |
| GSTs | Family Offices |
| Private Foundations | Life Insurance |
| 2010 Tax Act News | Industry Trends Surveys |
E-Newsletter Signup
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