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Family Wealth Ideas: The Gift of Non-Voting Stock

11.25.2014

Investment charts and calculator.compressedQ. My father wants to give me non-voting stock in his company so that he can save estate taxes. I would rather have voting stock so I can have a say in the management of the company. Should I turn down the gift?

A. It's a gift; you shouldn't turn it down. Your father is probably not ready to give up any control, but wants to shift value and maybe income to you. Non-voting stock is a good gift because it usually is valued at a discount from its pro rata value - because it does not have any control. So you can receive more stock within the gifting limits. Trying to lower the estate tax is an act of caring; he does not pay the estate tax, but you do. And remember to give thanks to your father.

Answers to your question about protecting and preserving your family's property.

David Heilich, Member in Charge, Family Wealth Planning Group

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