Divorce Issues and Business Succession Planning — footnotes

¹State law generally determines the rights and obligations of each spouse as to marital property. This article does not address the laws of any specific state, but merely touches on state law concepts as they pertain to the overall discussion.

²See Christians v. Christians, 732 So.2d 47 (FL Dist. Ct. App. 1999).

³See Haymes v. Haymes, 298 AD2d 117, 119 (NY App. Div., 2d Dept 2002) (court allowed discount in valuing a husbands business properties, which were equitably distributed to the parties pursuant to a divorce judgment, to reflect his minority interest and lack of control in the company). But see Brown v. Brown, 792 A2d 463 (NJ Super. Ct., App. Div. 2002) (court found no extraordinary circumstances warranting marketability or minority discounts in valuing a husbands 47.5% interest in a closely held floral businesswith 47.5% and 5% owned by the husbands brothersfor purposes of equitable distribution in a divorce action).

⁴For a general discussion of buy-sell agreements, see Jackson and Maloney, Buy-Sell AgreementsAn Invaluable Tool, Part I, 34 The Tax Adviser 200 (April 2003) and Part II, 34 The Tax Adviser 284 (May 2003).

⁵See also IRS Letter Ruling 9123053 (3/13/91) (payments made more than six years after cessation of marriage were tax free when made to effect the division of community property. Cash payments were made to the wife in 60 installments (one-half of the value of employment benefits)).

⁶Harmon v. Harmon, 173 AD2d 98 (NY App. Div., 1st Dept 1992).

⁷See Rev. Rul. 69-608, 1969-2 CB 42; William Sullivan, 363 F2d 724 (8th Cir. 1966), cert. den.; William Wall, 164 F2d 462 (4th Cir. 1947); and Mary Ruth Hayes,101 TC 593 (1993).

⁸See TD 9035 (1/14/03).

⁹See the preamble to TD 9035, id.

¹⁰IRS Letter Ruling 9230021 (4/28/93).