The idea of allowing people like bill gates to pass their fortunes free of tax does not sit well with many who otherwise are sympathetic to small business. Charities also fear estate tax repeal, believing that if people no longer have to leave wealth to charity to avoid the taxman, they will do other things with it. However these political decisions come out, though, estate tax repeal isn t going to happen tomorrow. Under both the bill that President Clinton vetoed last year and the proposal that President Bush has made this year, repeal would be phased in gradually over nearly ten years. Even if it is passed this year in its present form, many business owners will die without being in a position to benefit from repeal of the death taxes.
Lawyers can help the business owners with various techniques to carry out their decisions.
Some of this is basic estate planning, through wills and trusts and the like. Sometimes the work involves reorganizing the structure of the business to facilitate the planned future division of ownership. This can be particularly important if the parents are retiring and expect to receive retirement income from the family business. The lawyers can help devise a plan that minimizes death tax consequences for as long as death taxes remain a concern. In each case, though, it is essential that the lawyer s role be to implement the underlying family decisions.