USA Law and Practice Contributed by: Christopher Boyett, David Scott Sloan, Max Angel and Eric Bracy, Holland & Knight LLP
4.2 Succession Planning In the US, family business succession planning often involves the co-ordinated use of entity structuring, recapitalisation and trust-based strategies to transfer wealth and control across generations in a tax-effi - cient manner while minimising the potential for family An effective strategy is the use of entities such as an LLC, a family limited partnership (FLP), or an S Corporation. The senior generation contributes busi - ness assets to the entity and retains control through a small voting interest, while transferring non-voting interests – typically representing the majority of the economic value – to family members or trusts. These non-voting interests are generally eligible for valua - tion discounts due to lack of control and marketabil - ity, which reduces the taxable value of the transfer. This structure allows the transferor to shift significant value out of their estate while maintaining operational authority. When the non-voting interests are placed in trust, this also provides asset protection and allows for structured distributions, which can help reduce the risk of family conflict and maintain long-term control of the business. IDGTs To further enhance tax efficiency, many families utilise an IDGT. This strategy allows the senior generation to gift appreciating assets – such as non-voting business interests – into a trust for the benefit of future genera - tions. The trust is structured so that the grantor con - tinues to pay income taxes, allowing the trust assets to grow income tax-free. When paired with dynasty trusts, this strategy supports long-term wealth pres - ervation and minimises transfer tax. Private Trust Company (PTC) conflict. Entities For high net worth families with more complex needs, the formation of a private trust company (PTC) can be a valuable addition to the overall succession plan. A PTC is a family-controlled entity formed to serve as trustee of one or more family trusts. It allows the family to centralise decision-making, maintain privacy, and ensure that trusteeship remains aligned with the family’s values and long-term objectives. PTCs can be structured with flexibility, making them an appealing
option for families seeking greater control over trust administration and continuity across generations. Family Office Many high net worth US families also integrate a fami - ly office into their succession planning strategy to pro - vide centralised management of wealth, governance, and legacy planning. A family office can co-ordinate legal, tax, investment and philanthropic efforts across generations, ensuring alignment with the family’s long- term goals. In the context of business succession, the family office often plays a key role in overseeing trust administration, managing distributions and facilitat - ing communication among beneficiaries. This struc - ture helps reduce the risk of conflict by promoting transparency and professionalism in decision-making. The favourable regulatory environment and access to experienced fiduciary professionals in the US make it an attractive jurisdiction for establishing both single- family and multi-family offices. 4.3 Transfer of Partial Interest When a partial interest in a privately held entity is transferred during lifetime or at death, the fair market value of that interest is generally adjusted to reflect discounts for lack of control and lack of marketability, among other things. These discounts recognise that a minority interest in a closely held business is less valuable because it does not carry decision-making power and cannot be easily sold. In the US, this principle is commonly applied in estate and gift tax planning, particularly when transferring non-voting interests in LLCs or corporations to trusts. The use of qualified appraisals is essential to substan - tiate the valuation discounts and ensure compliance with IRS regulations. These discounts can significantly reduce the taxable value of the transferred interest, making them a powerful tool for tax-efficient wealth transfer.
5. Wealth Disputes 5.1 Trends Driving Disputes
Wealth disputes in the US are increasingly driven by a combination of legal limitations, evolving family dynamics, and the growing complexity of estate struc -
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