I—Recapitalization

A recapitalization through a preferred stock redemption can offer an effective and versatile estate planning technique for corporate stockholders. For example, when combined with a subsequent gifting program, it can:

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• Shift substantial future appreciation to children.
• Retain control of the corporation.
• Freeze the value of stock for estate tax purposes.
• Provide an ongoing income stream for retirement.
• Transfer corporate control when, and if, appropriate.
• Motivate younger employees.
• Facilitate distribution of stock at death.