Message Font: Serif | Sans-Serif
No. of Recommendations: 1
<<I am a small member of a family business.>>

So...does that mean that you're small in stature, and the family business is regular size? Or that you have a small interest in the family business (i.e., minority shareholder). I'll assume the latter.

<<For estate planning purposes what are the possible strategies that can be used for transferring of this stock to the next generation (I have children of my own now)?>>

Which estate are you concerned about? Yours? Or your family? If it's yours, there are a few ways to get the stock out of your hands. But since I don't know the value of the business in total, and the value of your shares specifically, it's difficult to make any recommendations. No use going after a flea with an elephant gun, right?

So without those values, or some feel for them, it's difficlut to provide any specifics. And, not only that, the interest that you show should be guided by a qualified tax and/or estate planning pro. It's not a "do it yourself" thing...something that can be built into your entire estate plan. So make sure to keep that in mind.

<< I am aware of the exclusions that are increasing annually but I am looking at all alternatives as well. >>

Certainly gifting the shares would be easy and quick...and might help with the problem. Creating a family lmited partnership might also do the trick. But your interest (minority, I assume) can be suficiently discounted to assist you with sucession planning relative to the business. Again, without knowing the size of the breadbox, it's difficult to provide any specifics.

<<Some sources have mentioned G.R.A.T.S but I am not too familiar with the concept. What are they referring too?>>

Grantor Retained Annuity Trust. Generally a vehicle that you use when you want to give property to charity now, but retain an interest in the income that the property throws off. Likely wouldn't work well for stock in a closely held corporation, unless the corp would want to repurchase those shares (or another shareholder would make the purchase). And the biggest issue is that you'd bypass the kids all together.

<<P.S. If you have internet links or websites that would be great as all information is appreciated.>>

I haven't really found anything on the web that I'm thrilled about. But there are more than a few good books that might help you out. So check out and see what you think.

Hope this helps...
TMF Taxes
Print the post  


In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.