esops and estate planning

[Guest Angie Horn]

How are esops used in estate planning ot reduce estate tax liability?

[RLL]

Angie.....this is hardly a question for which you can expect much guidance from a "short-answer" format such as a message board.

I recommend that you seek out learning materials on ESOPs. Good background information is available from The ESOP Association (www.esopassociation.org) and the National Center for Employee Ownership (www.nceo.org).

[Guest John Koresko]

Angie: I wrote Chapter 19 - ESOPs in the Life Insurance Answer Book (Panel, 1998). It is part of the Answer Book series. You might want to get ahold of a copy. I deal with the topic in a little depth.

[RLL]

I'd be very concerned about relying on a discussion of ESOPs in a book written about life insurance.

I strongly recommend getting your information on ESOPs from a more objective source, such as the two non-profit organizations (The ESOP Association and the National Center for Employee Ownership), referred to above. There are also many other books, etc., specifically about ESOPs, which are not limited to the use of ESOPs with life insurance.

[Bruce Steiner]

Obviously a short answer on a message board is not a substitute for a discussion with your own attorney. But from an estate planning standpoint selling a portion of the stock of your company to an ESOP may enable you to diversify your assets while avoiding current capital gains taxation and keeping effective control of the company.

If this is a specific case, you should consult with competent tax/estates counsel.

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Bruce Steiner, attorney

(212) 986-6000 (NY office)

(201) 862-1080 (NJ office)

also admitted in FL