In 2015, President Obama signed the Bipartisan Budget Act (“BBA”) to extend the national debt limit and spending caps through 2017. The BBA also repealed and replaced the Tax Equality and Fiscal Responsibility Act of 1982 (“TEFRA”) to substantially change how the IRS makes tax audit adjustments to partnerships and LLCs that are treated like partnerships for tax purposes. Although the proposed regulations to implement the new rules were frozen by President Trump early this year, the IRS recently reissued them and the new regulations will likely be finalized after a public hearing on September 18, 2017.
Last month on January 24th, 2017, the Puget Sound Business Journal hosted an extremely successful Family Business Symposium, inviting the leaders, employees and partners of businesses in the region that are owned and operated by members of the same family to discuss issues ranging from formal succession planning to the personal insights that come from operating a firm alongside multiple generations of the same family.
Garvey Schubert Barer represents dozens of family businesses and was proud to be a sponsor of the event. We were excited to see hundreds of attendees show up to hear from some of the region’s most successful family businesses.
Garvey Schubert Barer is proud to co-host its 2nd Annual Family and Closely Held Business Summit with USI Kibble & Prentice, Bader Martin, and BMO Capital Markets held on Thursday, October 27, 2016 at Hyatt at Olive 8 in Seattle, Washington.
The Pacific Northwest has the highest concentration of family owned and closely held businesses in the country. Perhaps this is due to the vestiges of the frontier spirit, which is still visible in the culture of entrepreneurship that is characteristic of our region. The Summit will consist of national keynote speakers and top-level family and closely held business advisors, and is geared towards providing actionable, practicable information for family or closely held businesses. It will address the pressing issues impacting these enterprises now and in the future, including the pertinent issues surrounding the outcome of the upcoming presidential election.
After years of slow boiling anticipation, statements made by the IRS and the Treasury this year heated up the conjecture and anticipation which finally came to a head on August 2, 2016. I’m of course talking about the just-released proposed regulations under Internal Revenue Code Section 2704 and the far reaching, highly negative implications for closely held family entities and the whole area of family business succession planning.
A family feud recently unfolded in the Connecticut probate court, a typical venue for family feuds to play out after the death of a successful business owner. That is the case especially when a contested will is produced favoring one child over another and there are allegations that the decedent suffered from dementia. In this case, adult siblings Dr. Laura Jarmoc and her brother, former state Representative Stephen Jarmoc, dispute whether Stephen looted his father Edwin Jarmoc’s estate starting in 1998 by transferring assets to himself, amounting to unjust enrichment at the expense of Edwin’s estate and Laura, as rightful 50% beneficiary. The Estate of Edwin A. Jarmoc tells the cautionary tale of a family business’s likely demise due to poor succession planning.
Garvey Schubert Barer and strategic partners Bader Martin, C.O.O. Services, Greene Holcomb Fisher, and USI Kibble & Prentice held the inaugural Family and Closely Held Business Summit at the Grand Hyatt in Seattle on November 5th, 2015. The summit addressed pressing issues that family and closely held business owners face today and will face in the future as they seek to grow sustainably and ensure that businesses remain a positive opportunity for generations.
The summit included presentations from professional advisors within various sectors, such as law, accounting, consulting, investment banking, private equity and insurance, as well as an interactive panel to stimulate ideas and discussion. GSB’s Hal Snow and Rochelle Haller presented on the topic of “Estate Planning for Business Owners – You Made it…Do You Want to Keep It?”, and David Smith presented “Privacy in the World of Hackers: Preventing and Responding to Security Breaches”, as part of the panel discussion on “Cyberattacks on the Rise: How Small and Medium-Sized Businesses Can Manage Risk and Survive a Breach” along with Michael Basilicato from Bader Martin and Scott Summers from USI Kibble & Prentice.
Other presentations included:
Cyberattacks on the Rise: How Small and Medium-Sized Businesses Can Manage Risk and Survive a Breach panel
Attendee reaction was very positive, and sentiment indicated that the event should be expanded to include a full day of topics in 2016. The GSB FCHB Practice Group is already working on the next year’s event!
In a soon-to-be-released article, Charities in Financial Distress: The Impact of Bankruptcy on Donor-Restricted Funds, Richard Fox, Jonathan Blattmachr, and Benjamin Bolas explore one aspect of bankruptcy filings by charitable organizations. Specifically, the authors discuss the vulnerability of some charitable contributions to creditor claims of the bankruptcy estate.
Garvey Schubert Barer’s family-owned and closely held businesses practice group comprises strategic advisors and core practitioners who understand the intersection between law and the unique challenges of running a family business. With more than one hundred years of combined experience, our family-owned and closely held businesses practice offers clients extensive resources and a knowledgeable team of family wealth advisors across the Unites States.