take advantage of Section 6166, more than 35% of your adjusted gross estate must be from your business interests. If eligible, your executor can pay the estate tax in 10 annual installments. This alleviates the burden of having to generate one lump sum within 9 months of your passing. Under 6166, the first installment isn't due for five years. This gives your business time to earn the money to cover the taxes.
Bob and Mandy can sign a buy-sell agreement contract that will establish a sale price of the business and Bob’s share in the business. Since Bob wants Mandy to take over the business after he passes he can set a price for his share in the business and Mandy can buy out his share in the business with this contract.
Bob and Mandy should …show more content…
From Estate Planning for Business Owners (www.quickbooks.intuit.com):
Additionally, a living trust assists family businesses in transferring ownership. After transferring the company to the trust, the owner can specify a successor who will take over the trust at a designated time, usually upon the owner’s death. Forming a living trust can also reduce estate taxes that would apply during the probate process.
A living trust will help protect your family and assets from being liable for any personal debts. Establishing the trust will ensure that the land and business investments remain intact for the continued operations of the business even after Bob passes.

Estate planning strategies consistent with tax codes and regulations for the purpose of reducing the estate.

Bob should spread gifts throughout his lifetime to reduce his taxable estate. Bob can gift $14,000 per year per recipient. There are no tax consequences to the recipient of the $14,000. Bob can donate directly to Mandy’s educational school and any medical expenses to minimize taxes. The IRS allows you to gift $5.45 million during your