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Expert Advice for a Georgia Resident's
Assets, Wills, Businesses, and Estates

Nancy Drew, the Hardy Boys and the Buy-Sell

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Stock CertificateDo you own all or part of the company you work for? Your equity doesn’t die with you.

So your family and heirs don’t have to shrug their shoulders, send out a “We’re sorry to announce . . .” letter, and walk away from the value you’ve built up. I.R.S. won’t be walking away from it.

Impossible? No. How about your business phone number? It’s an asset which could be sold if you stop working, voluntarily or otherwise. The same goes for key files and lists.

That’s why I.R.S. stays interested.

But a “Buy-Sell Agreement” makes things easier for your family with I.R.S. by locking values into place.

Consider what happened with the Hardy Boys and Nancy Drew.  Nancy, Frank and Joe were getting a little long in the tooth. They still had a bunch of work — all was not peaceful in either Bayport or River Heights — but the commute was a killer. Worse, their children didn’t want to be detectives.

So succession and taxes were a concern at Hardy-Drew-Hardy, Inc.

Nancy’s best friend Bess Marvin was now a lawyer with the boys’ best friend, Chet Merton. They were meeting with their buddies.

Joe Hardy’s wife had died, and he had just learned that when he dies, their kids will face a big tax on his detective agency shares. “Isn’t there some way around it?” asked Joe.

“Well, yes,” answered Chet. “If you all had a Buy-Sell Agreement, we could control what your Hardy-Drew-Hardy shares are worth and that will save your children a bundle of taxes.”

“His shares are worth nothing when Joe dies!” exclaimed Frank. “He’s the main business-getter these days.”

“IRS could care less about what his stock was worth the day after his death,” said Bess. “An agent will want to know what it was worth the day before he died.”

“That’s not fair!” wailed Nancy, smacking her cane into the side of the desk.

Chuckled Chet, “We didn’t make up these rules, Nancy, but they’re the same for every owner in every privately-owned company, corporation, partnership, L.L.C., limited partnership, even sole proprietorships.”

Bess continued, “But I.R.S. will go along with a stock value fixed in a reasonable Buy-Sell Agreement signed by unrelated parties. And last I looked, you three aren’t related!”

“Nice detective work,” Frank snorted. “But even so, can’t we just agree on some dollar value we like for the stock and then update it from time to time?”

Chet warned, “If things are good in a business, nobody remembers to do the revaluing. And if things are going bad, nobody ever agrees on anything, much less a value of a business going down the tubes.”

“Better if we help you devise a formula for your share value,” continued Bess. “Then we also pin down what Hardy-Drew-Hardy can afford to pay if one of you dies or is disabled. That’s what the Agreement is all about.”

“What if we don’t do a ‘Buy-Sell Agreement’?” grumbled Nancy.

“Well, I.R.S. can pick its own value for your stock, and your family can litigate with them for years,” said Chet.

Bess added, “And that makes things worse on your children. They and the Service and the courts may come up with one share value. But Hardy-Drew-Hardy won’t be obligated to pay them the difference. Your heirs get stuck in the middle.”

Chet said, “So why not just avoid the whole problem, and do the “Buy-Sell?”

“It’s the ‘Secret of the Missing Agreement’ all over again,” said Nancy.

“I don’t remember that one,” said Joe.

“Maybe it’s time we did,” said Frank.

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