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Note
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Reference no. 9-293-063
Published by: Harvard Business Publishing
Originally published in: 1992
Version: 8 August 2005
Length: 3 pages
Data source: Field research

Abstract

The so called estate freeze is a classic estate planning and recapitalization practice. It seeks to reconcile the multiple human and business considerations associated with transferring operating control and the future increases in the value of a family dominated business from the retiring generation to the next generation of family management. The note describes the various objectives that need to be reconciled, the concept and mechanics of the practice, several areas of abuse that developed, the Treasury's overreaction to those abuses, and the current posture of the law and practice.

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Abstract

The so called estate freeze is a classic estate planning and recapitalization practice. It seeks to reconcile the multiple human and business considerations associated with transferring operating control and the future increases in the value of a family dominated business from the retiring generation to the next generation of family management. The note describes the various objectives that need to be reconciled, the concept and mechanics of the practice, several areas of abuse that developed, the Treasury's overreaction to those abuses, and the current posture of the law and practice.

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