There are several types of corporate continuation plans. If it is the desire to keep the business in the family, but money is needed from the corporation to pay federal estate taxes or other estate settlement costs, one should examine a partial stock redemption under IRC Sec. 303.

If the business interest is to be passed to others, like surviving co-owners, several choices are available, such as First Offer of Stock to Existing Stockholder(s), Options to Buy, Cross-purchase Buy-sell Agreements, Stock Redemption Plans, or Wait-and-See Plans.

Some questions to consider:

• What is the value of the corporation and who can afford to buy it?
• How many owners are there and how old are they?
• What percentage of ownership does each person have?
• Are the owners related?
• Are they all insurable?
• What is the net worth of each owner?
• What are individual tax brackets and the corporate tax bracket?
• Does the non-active spouse have any rights, e.g. community property interest?

WSA can help you decide which option will work best for your business.

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