The Death Tax Strikes Again!
June 6, 2024
A recent Supreme Court decision could reduce the value your heirs receive for your ownership in a privately owned business by up to 40% of any life insurance proceeds used in a redemption buy-sell arrangement!
Does your company use life insurance to fund a buy-sell agreement where the company buys back the shares of a deceased owner? If so, this Supreme Court decision could warrant immediate action.
According to the ruling, the estate tax value of redeemed shares will not be reduced by the redemption obligation funded by life insurance to buy back a deceased owner’s shares.
If your company has a redemption agreement within its buy-sell agreement that is funded by life insurance, I recommend you immediately review the terms of your agreement. You may need to make changes to avoid paying millions of dollars in “death tax”!
The Saturday Wealthpreneur
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David Thach shares his 25+ years of experience with privately held companies to help today’s Wealthpreneurs succeed.
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