Malleo Financial Services

Michael A. Malleo 

Phone: 201-321-7041

mike@malleofinancialservices.com

 

Terms of Notarial Acts:

Acknowledgement – Certifying that a signer personally appeared before the Notary, was identified by the Notary, and acknowledged freely signing a document.

 

Malleo Financial Services is a proud member of ALTA (American Land Title Association), the American Society of Notaries, and the National Notary Association (NNA). We're also a Fidelity National approved closer. 

 

FIDELITY APPROVED CLOSER
FIDELITY APPROVED CLOSER

 

*The opinions expressed on this website are strictly those of Malleo Financial Services, LLC and not those of ASH Brokerage Corp.., or any of our affiliates.

 

*Malleo Financial Services LLC cannot and

will not give any tax or legal advice.

 

Protecting Multiple Businesses

 

Challenge 

The Smith family owns and operates a farm and three additional property LLCs. John and Mary own 100 percent of the farm while their two sons, Larry and Joe, own the real property equally. Currently, they have no buy-sell agreement in place as John and Mary assume they will transfer the farm to their sons through lifetime gifts and a Will. However, they have two concerns.  First, they are worried they will not have enough money for retirement.  Second, they are concerned the real estate would be sold if it ended up in the hands of their sons’ spouses. 


 

Solution 

The best solution would be using a life insurance policy to fund a buy-sell agreement and key-person life insurance for the multiple entities. The buy-sell agreement will ensure the properties are purchased from Larry and Joe if they die before their parents – removing the risk of the spouses. It also ensures the sons have the liquidity to purchase the farm from John and Mary should they die prematurely. Finally, John and Mary use lifetime gifts to give each son a 5 percent minority interest in the farm, and they enter into an installment note for Larry and Joe to purchase the remaining farm shares over time. This will generate the income needed for the parents’ retirement and create a smooth ownership transition. 


 

For a free consultation, please contact us for an appointment.

 *This blog is strictly the opinion of Michael A. Malleo and not those of

ASH Brokerage Corp., nor any of our affiliates.

 

Malleo Financial Services LLC cannot and will not give any specific tax or legal advice.

Please consult your tax professional or legal professional for such advice.