ESOP Feasibility Formation & Ongoing Compliance/Governance Counsel
An Employee Stock Ownership Plan (hereinafter “ESOP”) is a qualified defined contribution retirement benefit plan governed under provisions of the Internal Revenue Code and the Employee Retirement Income Security Act of 1974 (commonly referred to as “ERISA”). Functionally, an ESOP utilizes income tax deductible “contributions” from its sponsoring employer or employers to purchase and hold sponsoring employer’s securities. The ESOP holds the sponsoring employers’ securities for the benefit of the ESOP’s participants (employees qualifying to participate in the ESOP of a sponsoring employer). An ESOP is unlike other “qualified” retirement plans in that the ESOP Trust (commonly referred to as an “ESOT”) is designed to primarily hold stock of the sponsoring employer for the benefit of the “participants.”
Tax Law Office, P.A. provides legal counsel and services related to the feasibility of a “sponsoring employer” establishing an ESOP. Feasibility services include but are not limited to the benefits and potential costs of forming an ESOP, the long term consequences of ESOP formation, potential conflicts that may arise in the formation and operation of an ESOP, the annual administration and governance involved in operating an ESOP, the income tax consequences of ESOP formation both to the sponsoring employer and to the sellers, financing of the ESOP’s purchase of sponsoring employer securities, working with other ESOP service providers in providing counsel in areas such as ESOP administration, repurchase liability calculations, valuation analysis, potential financial reporting issues, review and likely revision of historic contractual and governance documentation issues, anticipated sponsoring employer executive compensation planning subsequent to the ESOP formation, etc.
In conjunction with the ESOP feasibility services and counsel, Tax Law Office, P.A. will draft the legal documents for implementation of the ESOP. Documents to be drafted may include, but will not be limited to, the ESOP document, stock purchase agreements, exempt loan documents, corporate governance documentation, etc. Upon completion of the ESOP implementation services, Tax Law Office, P.A. will continue services and counsel to the ESOP trustees and corporate directors (when dealing with ESOP issues) for ESOP administration matters arising subsequent to implementation of the ESOP.
Entity Governance and Maintenance
In today’s world most business (corporations, partnerships, limited liability companies, etc.) and family (revocable trusts, irrevocable trusts, partnerships, etc.) entities need to document their governance and administrative issues on at least an annual basis. Historically, the primary purpose for undertaking this governance documentation was to document the “existence” of an entity for legal liability purposes. In recent years, however, governance documentation has become ever more important to document the “business purposes” for taxation (income, estate, gift, excise, sales and use, etc.) purposes. The Tax Law Office, P.A. will counsel and provide services to its clients with regard to the documentation of governance related to all aspects of a business entity or family entity’s legal or tax documentation issues.Choice of Entity Planning
When organizing a new business or family entity or reforming an existing business or family entity, the organizers must determine the legal structure that will be most beneficial for not only state legal liability purposes, but also the most beneficial entity for federal and state income and other tax purposes. Today there is a multiplicity of legal entity forms from which to choose. Tax Law Office, P.A. understands the complexity of these decisions and provides counsel in this regard not only considering legal liability issues but also considering the taxation issues.Civil & Criminal Tax Controversy and Litigation
Tax Law Office, P.A. attorneys have represented clients in the tax and fiduciary responsibility aspects of federal and state taxation and administrative law controversies under ERISA for over fifteen years. Tax and administrative law controversy representation includes but is not limited to examinations by the Internal Revenue Service (civil and criminal), examinations by various state income tax examining agencies , examinations by state sales and use tax agencies, examination of qualified retirement plans (under ERISA) by the Federal Department of Labor, etc. Services and counsel provided include client representation related to the “initial” audit, appeals of administrative agency findings, litigation in federal and state courts, etc.Business Succession Planning
Succession Planning has always been an extremely important factor in the survival of both small businesses and large businesses. In the “business market” Tax Law Office, P.A. serves, we understand the importance of counseling clients regarding the construction of and ultimately the implementation of a well thought-out succession plan. Whether a client is inclined to transition their “business” to family members “selling” the business to employees or selling the business to a third party, Tax Law Office, P.A. provides counsel related to the income and estate tax consequences, the entities to be utilized in implementing the succession plan, mitigation of the potential risks and liabilities associated with the succession plan, etc. Tax Law Office, P.A. views succession planning as the most important area of our practice and incorporates this understanding of importance in providing counsel and services in this area.Business Mergers, Acquisitions, and Sales
Tax Law Office, P.A. also represents buyers and sellers regarding the structure of transactions in which a portion or all of the business assets or ownership in a business entity are sold. As with succession planning, Tax Law Office, P.A.’s counsel and services related to its client’s business mergers, acquisitions, sales, purchases, etc. includes but is not limited to both the legal and taxation (income tax, sales and use tax, estate tax, gift tax, etc.) issues involved in the transaction. Tax Law Office, P.A.’s recognition of the significance of the taxation issues related to merger, acquisition and sales transactions provides Tax Law Office, P.A. clients with a significant advantage in negotiating these transactions.Estate Planning
Estate planning is the process of anticipating and arranging for the disposal of one’s assets and liabilities at the time of their death. In the United States, estate planning must include planning for the likely ultimate payment of a federal gift or estate tax, as well as (in most cases) a state inheritance tax. In recent years, the Federal Government has made the estate planning process extremely difficult with ever changing exemptions, legislative sunset clauses, substantial changes in the tax rates, etc. States have followed the Federal lead in making substantial changes to their inheritance tax regime. In short, planning for one’s death has always been complex; however, with the implication of ever changing estate and inheritance tax law and rates this area of legal practice dictates a high level of financial and legal proficiency.
Tax Law Office, P.A. addresses the complexity of estate planning by concentrating on both the legal transfer of a decedent’s assets and liabilities (in accord with the wishes of the deceased) and also with significant attention to the estate and inheritance tax consequences of the transfer. This two pronged approach to estate planning provides the client (and their families) with a well thought out and structured overall estate plan providing the deceased’s heirs with the highest level of net asset transfers available based upon the deceased’s stated withes.
Wills, Trusts, and Probate
As part of the estate planning process, Tax Law Office, P.A. will likely undertake to draft the following documents:
Will: a legal declaration by which a person, the trustor, names one or more persons to manage his/her estate and provides for the transfer of his/her property at death.
Trust: a document under which property (including but not limited to real estate, tangible and intangible personal property) is managed by one or more persons or organization for the benefit of declared beneficiaries.
Life Insurance Trust: usually an irrevocable trust (a trust that cannot be changed (with certain exceptions) once consummated), which is both the owner and beneficiary of one or more life insurance policies. Upon the death of the insured or insured’s, the Trustee invests the insurance proceeds and administers the trust for one or more beneficiaries. Properly undertaken, the Life Insurance Trust will be non-estate taxable to the “estate” of the deceased.
Living Trust: a trust created during a person's lifetime primarily to establish long term management of the “property” placed in the trust. Living trusts will usually avoid probate proceedings (see subsequent definition of “probate”) and may reduce income and estate taxes, safeguard financial privacy, regulate the use of assets if the owner becomes incapacitated, etc.
Probate: the “legal” process of administering the estate of a deceased person by resolving claims and distributing the deceased person's property either under provisions of the wishes stated in the decedent’s Last Will or under provisions of state law if the decedent dies without a will (commonly referred to as “intestate”).
Tax Law Office, P.A. provides legal services and counsel in all areas of Will preparation, trust preparation and probate all within the confines of a well thought out overall estate plan based not only on legal issues but also the related taxation issues that are associated with death.