Gene K. wanted to give his oil company to his son Gregg. He also wanted to retain control and avoid
gift taxes.

Meanwhile, the IRS was poised to take a significant share. This was a problem Gene had been struggling to solve for years. Ashton Group presented him with a novel idea: recapitalize the company into 2 percent voting stock and 98 percent non-voting stock, then split the non-voting stock into minority interests and sell them to two Defective Grantor Trusts structured with Gregg as
the beneficiary.

To streamline this process, we recommended a law firm with specialized experience to work with Gene's advisors and draft the documents. The result was a highly successful tax mitigation plan, executed to the last detail.

The IRS allowed the value of Gene's company to be discounted by more than 40 percent and took nothing in taxes. Gregg now owns 98 percent of the company, while Gene has kept control of the remaining 2 percent.

To protect client confidentiality in the above case study, full names are not disclosed.