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“Articles Concerning Trusts, Wills, Probate, Family Law & more”

By Stephen C. Ross, Esq.

September 13, 2014 (San Diego County) – Planning to pass on a family business can be very challenging due to the many issues that must be considered. Business succession issues include: who will take over from the current owner; potential income and transfer taxes; when does the ownership transfer take place; how should the new owner hold his/her interest; and, are there family members to consider who are not active in the business.

A buy-sell agreement is an important part of any plan to pass on a closely held business. Such agreements can designate who is to receive company shares and in what quantity. The agreement may grant a right of first refusal to certain individuals and/or entities. Ownership of the business in the event of divorce may also be included in the agreement.

A primary goal of buy-sell agreements is to establish the price of the business for estate tax purposes. The agreement must meet six criteria if it is to successfully establish the business price for estate tax calculation. They include: agreement must be made in good faith; it cannot pass the business to family members for less than full value; agreement terms must be similar to those found in arm’s-length transactions; business price must be the same both during the owner’s life and at death; deceased owner’s estate must be required to sell the business at the agreement price; and, price is either fixed or subject to calculation.      

Stephen represents estate planning, trust, will, probate, trust administration, business formation, stepparent adoption and family law matters. He conducts estate planning and probate seminars throughout San Diego County. For more information or to schedule a seminar contact Stephen at (619) 795-8524, or visit

Disclaimer: Information contained in this article is believed to be accurate. However, you should seek professional legal advice before relying on the information. Stephen is not licensed to practice law in any state other than California and “The Attorney’s Corner” is not intended as an advertisement.

Visiting Stephen’s website does not create an attorney-client relationship and confidential information is not protected until a written agreement is signed.

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