Some retirees continue to own a substantial interest in their family business in the north.
For such retirees, it is important that they discuss with their professional advisors how they might become eligible for the special reduction in estate taxes passed by Congress in 1997. This new exclusion is not limited to corporations. Proprietorships and entities carrying on a trade or business are also included. The law permits two or three separate families to own the business so long as certain other percentage ownership tests are met. Keep in mind, however, that a recapture of the estate tax savings occurs if certain eligibility requirements are violated within ten years of the retiree's death.