MAS Posted July 29, 2020 Posted July 29, 2020 If a business owner legally disowns and/or disinherits his adult son, would his son still be considered a Highly Compensated Employee? The son has no direct ownership of the company and is well under the compensation threshold.
CuseFan Posted July 29, 2020 Posted July 29, 2020 Yes, still HCE, there is no legal requirement to provide an inheritance and once an adult there is nothing for the parent to dis from owning, i.e., no support obligation. Allowing this situation to make the son an NHCE would simply create all sorts of potential abuse, which is questionable here in my mind - if relationship is that strained, why is son still working for parent? Luke Bailey 1 Kenneth M. Prell, CEBS, ERPA Vice President, BPAS Actuarial & Pension Services kprell@bpas.com
Larry Starr Posted July 29, 2020 Posted July 29, 2020 3 hours ago, CuseFan said: Yes, still HCE, there is no legal requirement to provide an inheritance and once an adult there is nothing for the parent to dis from owning, i.e., no support obligation. Allowing this situation to make the son an NHCE would simply create all sorts of potential abuse, which is questionable here in my mind - if relationship is that strained, why is son still working for parent? I can tell you I have a couple of situations where the father and son just hate each other; the father owns 100% of the business and the son thinks HE owns the business. Not a fun situation for meetings with the two of them. I keep asking the same question: why not fire the son? But I know the answer: because he's my son!!!! Sheesh!!!! Lawrence C. Starr, FLMI, CLU, CEBS, CPC, ChFC, EA, ATA, QPFC President Qualified Plan Consultants, Inc. 46 Daggett Drive West Springfield, MA 01089 413-736-2066 larrystarr@qpc-inc.com
CuseFan Posted July 30, 2020 Posted July 30, 2020 19 hours ago, Larry Starr said: I can tell you I have a couple of situations where the father and son just hate each other; the father owns 100% of the business and the son thinks HE owns the business. Not a fun situation for meetings with the two of them. I keep asking the same question: why not fire the son? But I know the answer: because he's my son!!!! Sheesh!!!! Truth is stranger than fiction, for sure, and I bet there have been a lot of "interesting" stories arising out of that situation. Kenneth M. Prell, CEBS, ERPA Vice President, BPAS Actuarial & Pension Services kprell@bpas.com
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