Trust and estate attorneys
Typically, when we’re engaged by trust and estate attorneys, it’s for the purpose of conducting business valuations. The reason: Many factors enter into determining the value of assets such as businesses, real estate, and other holdings that are given, sold, or bequeathed.
Gifts to children: In estate planning, for example, let’s say a business owner wants to give a piece of the business to each of his children. He now owns 100% of the company. He wants to give 20% to his son, 20% to his daughter, and keep 60% for himself.
What’s the actual value of the shares he gives to his children? When valuing a minority portion of a business, the calculations are more complex than simply dividing 100% of the business into shares. For example, a minority stockholder can easily be outvoted. Therefore, $200,000 worth of shares of an existing business may actually be worth less than $200,000, because of the minority shareholder’s lack of control over company business decisions. That $200,000 worth of shares may actually only be worth about $180,000.
Baseline valuations: Another way in which we can help trust and estate attorneys is to perform a baseline valuation of a business before the owner’s death. Reason: That valuation could show the IRS that the same methodology was used in determining the valuation both before and after death—e.g., to prove that the gift tax or estate tax value was determined with no bias.
Handling of estates: On occasion, we have been called upon to investigate questionable transactions executed by a trustee or executor.
Elder asset protection: If there's any question about whether the assets of an elderly person have been misappropriated or mishandled, we can discover fraud and identify questionable financial transactions. Conversely, we can assure the client and his/her spouse and/or children that assets have been valued properly and adequately protected.
