An Estate Planner's Guide to Buy-Sell Agreements for the Closely Held Business, Fourth Edition - by Louis A Mezzullo (Paperback)

About the Book

"This monograph is designed for the estate planner who is assisting the owners of a closely held business in structuring an arrangement to deal with the withdrawal of an owner from the ownership of a business, which may or may not coincide with the owner's termination of employment in the business"--

Book Synopsis

An Estate Planner's Guide to Buy-Sell Agreements for the Closely Held Business is a comprehensive guide to buy-sell agreements for estate planning attorneys and other professionals who advise closely held businesses and their owners. It includes a detailed discussion of the objectives of a buy-sell agreement, which are the reasons for having such an agreement. There is also a detailed discussion of the drafting issues, including tax and nontax issues. The focus is on accomplishing the objectives of the owners in the business and in avoiding potential conflicts.

There is a detailed discussion of establishing the value of an interest in a close held business for estate tax purposes, and when the price under a buy-sell agreement can establish that value. The book also covers income tax consequences and includes a discussion of special considerations in connection with drafting buy-sell agreements for S-Corporations, partnerships, and professional corporations. The book also covers consideration in valuing an interest in closely held businesses and unique problems when dealing with family-owned entities.

This fourth edition reflects changes to the tax code made by the Tax Cuts and Jobs Act of 2017 and includes a discussion of the Connelly case, which dealt with when the price under a buy-sell agreement will establish the value for estate tax purposes and whether life insurance proceeds used to purchase the interest of a decedent owner in the business should be included in the value of the business for valuing the decedent's interest in the business for estate tax purposes.

An attorney who represents closely held businesses needs to be familiar with such issues, even if not actually involved in drafting such agreements. In many cases, the attorney or other advisor will need to review such agreements when advising the client who owns an interest in a closely held business. The agreement will alert the advisor about restrictions on the owner's ability to transfer the interest and whether the owner's interest will be purchased by the entity or other owners when the owner dies, becomes incompetent, or desires to terminate the owner's interest in the entity.