The use of valuation clauses in estate planning expected to increase

BVWireIssue #104-1
May 4, 2011

In his article“Valuation Clauses: Panacea or Pandora's box?” recently published in Trusts & Estates, Stephen Liss (Withers Bergman LLP) reports that landmark court cases in the past few years support the increased use of valuation clauses in estate planning. He explains:

A non-voting interest in an LLC is a so-called “hard-to-value” asset and is therefore…well…hard to value. Honest people disagree. The solution is a valuation clause.

“It’s time to think about the consequences that taxpayers will have to face when a valuation clause is actually implemented,” the author explains. “The more complicated the underlying investment held by the LLC and the more complicated the financial affairs of the client, the greater the challenges posed by valuation clauses.”

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