TAX AND BUSINESS PLANNING
Each partner practicing at MK holds an advanced degree in taxation and is well-equipped to help our clients navigate the complex tax laws in order to achieve beneficial results. We are familiar with the intricacies among the federal, state and local income, estate, gift, transfer, sales and use taxes of several jurisdictions, and are therefore able to provide comprehensive planning strategies and advice.

MK has the depth of knowledge, understanding and experience to efficiently handle issues arising from U.S. tax laws. Our tax practice includes tax planning in connection with mergers and acquisitions, reorganizations, spin-offs, venture capital and LBO transactions and funds, financings, hedge and other funds, management compensation, real estate transactions, securitizations of debt, and other specialized areas. We structure business transactions with careful, creative attention to the resulting tax consequences. Our knowledge and creativity have saved our clients substantial amounts of money that would otherwise have been paid to the IRS or other governmental bodies.

Private Equity and Venture Capital; Management Compensation
Our tax attorneys become involved in private equity and venture capital transactions at an early stage, and our experience and creativity add tremendous value to these transactions. We have extensive experience representing both founders and investors in structuring domestic start-up businesses and venture capital investments to take advantage of the many benefits offered by tax laws. These benefits include flow-through taxation and the large rate differential between capital gains and ordinary income for individuals. Our knowledge and foresight allow us to structure both traditional and cutting-edge debt and equity investments in limited liability companies, partnerships, C corporations and S corporations. In addition, we structure transactions to allow ample flexibility when determining a proper exit strategy, including initial public offerings, refinancing, and taxable and tax-free sales.

For start-up businesses, it is often important that management has an equity interest in the company. Key employees increasingly expect or desire performance-based incentives in addition to more traditional compensation. We use the latest and most efficient types of equity-based compensation, including real and phantom equity, options, appreciation rights and restricted equity to offer employees incentives while minimizing the tax cost of such arrangements.

Real Estate Taxation Our attorneys frequently provide value in structuring real estate transactions, including partnership tax allocation provisions that often have substantial impact on the after-tax results of an investment.

In this regard, the attorneys of MK are skilled in implementing various valuation freeze techniques, such as family limited partnerships, private annuities, and installment sales structures, to achieve tax and non-tax objectives for families.

Partnership, LLCs, and Syndications Our lawyers recommend that clients use pass-through entities such as partnerships and limited liability companies in a variety of business contexts, both for individual and for corporate ventures. We know how to draft the intricate tax-allocation provisions of partnership agreements and operating agreements as well as structuring the various non-tax provisions of these agreements. We have had extensive experience in limited partnerships and LLCs that own real estate, oil and gas assets, horses, and cattle, as well as entities engaged in securities trading, venture capital, hedge funds, and selected industry funds.

Tax-Exempt Organizations MK has successfully obtained exemptions for, and/or given tax advice to, numerous types of tax-exempt organizations, such as:

private foundations
public charities
charitable trusts
hospitals
community foundations
museums & other entities which further the arts or social causes
business leagues social clubs

In our representation of tax-exempt organizations, we participate in structuring transactions between such organizations and for-profit entities and individuals. In addition, when our tax-exempt clients enter into joint ventures with for-profit entities or individuals, we assist them in structuring the transactions to minimize the amount of unrelated business taxable income and to protect their tax-exempt status.

State and Local Taxes Our Firm regularly takes into account the state and local tax consequences of a transaction, in addition to the federal. In fact, we often are called upon to structure a transaction or a business organization primarily to maximize state and local tax efficiency.

GENERAL COUNSEL PRACTICE
MK recognizes that general counsels have an increasingly significant and challenging role in the corporate and legal worlds. They must identify and solve a broad array of legal issues as lawyers, officers and members of senior management within their corporations. General counsels analyze business and legal issues concurrently to help their clients fulfill the corporate mission. In many cases, they are also expected to serve as the “moral compass” of the corporation.

In the last few years, general counsels have been facing greater pressures from new and increasingly complex requirements as a result of corporate governance reforms. Whether the corporation is publicly traded, privately held or nonprofit, complicated new demands are being placed on boards of directors and senior management that, in turn, fall into the general counsel’s purview.

MK has partners and attorneys of-counsel who have served as general counsels and who have successfully faced the range of issues that confront you and your corporation. We have developed a practice devoted solely to providing the innovative, strategic legal and business counsel, and the skillful management approach to matters that experienced general counsels can offer.

What we do for our General Counsel Practice clients:

Experienced General Counsels - Demands for service from the general counsel’s office are escalating, leaving every general counsel with a mountain of work yet to be done. We can help general counsels to conquer their mountains of work and to manage the big strategic issues. Using our understanding of corporate expectations and both business and the law, we can help you meet your “stretch goals.”

New General Counsels - Often, a new general counsel has few people to turn to for advice. Our General Counsel Practice is a significant resource and can help provide solutions. We can advise new general counsels as they begin to chart their own paths and identify and implement best practices.

In-house Corporate Counsels - Lawyers in corporations face myriad questions and not all answers can be found in a law book, or there simply is not enough time to research all questions thoroughly. We can help you resolve many of these questions expeditiously, all based on solid legal and business counseling.

CEOs and Corporate Boards Without a General Counsel - Not every corporation is ready to hire and integrate a general counsel into senior management. If that is the case for your company, as a CEO or Board member, you may notice that using several lawyers in different practice areas is not providing you with confidence in the control you need over all legal matters. If each of these lawyers is currently working with a different corporate officer or manager, we may be able to help the corporation more effectively manage its outside legal service providers.

MK's General Counsel Practice is ready to help you address the rapidly evolving concerns of general counsels today, including corporate governance, corporate compliance and investigations, corporate and securities, mergers and acquisitions, intellectual property, financial services, executive compensation, labor and employment, advertising, antitrust, customs and international trade, litigation and dispute resolution, and real estate.

TRUSTS AND ESTATES

MK offers a proactive approach to the traditional estates and trusts/private clients practice. First and foremost, we listen to our clients and work closely with them to develop long-term personal and family goals. Whether the subject is estate planning or administration, trust administration and construction, or fiduciary or tax litigation, we pride ourselves on our creative approach to problem solving. The breadth of our experience in representing high-net-worth individuals and their families, as well as trust companies, provides clients with practical and sensible approaches to tax and non-tax problems. Often, our advice in developing a plan to educate younger family members in the handling of wealth is as important to the client as an estate planning technique which may save the family millions of dollars in transfer taxes. We offer years of experience and a positive approach to transition planning for closely held businesses and complicated family situations.

We understand that success in this area must combine legal, tax, and business experience with the skills required to act as family advisor and counselor. This is the proactive perspective we offer to our clients.

MK’s Trusts and Estates practice focuses on a broad range of personal services directed to the firm’s individual and business clients.

Personal and Closely Held Business PlanningPersonal planning services include traditional estate planning and estate and trust administration, all related aspects of estate, gift, and income tax, and trust construction and related litigation. This area emphasizes wealth enhancement and transfer for high-net-worth individuals and business succession planning for closely held businesses. Representing our clients often involves coordinating corporate activities and ownership with estate and financial planning for management and principal stockholders. We use our business acumen, legal experience, and problem-solving abilities to design a plan that meets the objectives of our clients.

Our approach to estate planning includes a comprehensive view of each individual client’s lifetime and testamentary planning needs. Typically, a client will need comprehensive, goal-oriented analysis, as well as the traditional estate planning and income-shifting vehicles. Where appropriate, we recommend and execute the most sophisticated techniques to reduce transfer and income taxes. GRATs, CRTs, QPRTs, and the like are used by estate planners every day, but applying the appropriate technique to the right client situation is a function of experience and judgment which we have developed over many years.

Our practice is proactive. We recognize that clients cannot be expected to know the most current estate-planning techniques and we do not hesitate to present clients with ideas that may be helpful in furthering their goals.

Estate and Trust AdministrationEstate administration is a principal part of our practice. We regularly provide the full range of support services to individual and corporate fiduciaries. Our philosophy is that the assets of an estate belong to the beneficiaries and the job of the fiduciary is to comply with all legal requirements and distribute the assets as promptly as possible. We do everything possible to facilitate trust and estate settlements, and are assisted by an extraordinary group of highly trained legal assistants who meet clients’ needs economically and efficiently. Many of the tasks in estate and trust administration need not be performed by a lawyer, and our clients will not see partners and associates performing tasks that could readily be handled by legal assistants.

In addition to estate administration, in some of our offices we regularly administer trusts for our clients, offering a full range of tax preparation, asset custody, and accounting services for individuals acting as fiduciaries.

As an accommodation to clients, certain partners of the firm will act as personal representatives (executors) and trustees. These partners offer years of experience and objectivity to families in meeting their fiduciary needs.

We have strong relationships with a number of local and regional banking and investment advisory firms. Members of our group have litigated a broad range of tax issues and cases involving trust, will, or other document construction.

The following are some examples of the various types of matters that demonstrate the philosophy and approach of MK’s Trusts and Estates practice.

We have successfully represented trustees and beneficiaries to negotiate family settlement agreements that would otherwise have become contested matters. In one case, we represented a corporate trustee where suit was threatened by a decedent’s spouse from a second marriage. This surviving spouse wanted her claim against the trust satisfied, although the primary trust asset was a closely held business which was partially owned and totally operated by the children of the first marriage and the decedent’s brother. We worked closely with counsel for the spouse and separate counsel for the children to retain the business and achieve a settlement among the various parties, thereby avoiding litigation which would have been severely detrimental to the business. Although we are confident about our ability to litigate contested matters, our capacity to determine the proper timing and appropriateness of settlements favorably distinguishes us from many other estate planners.

Our attorneys have represented clients in succession planning for closely held corporations, which not only requires legal and business experience but also skill in dealing with family and personal issues. As an example, we represented a business in the transfer of equity ownership and control to the sole owner’s children in an equitable manner, despite a complicated family situation involving several children who were involved in the business, spouses of other children who were involved in the business, and other children who were not involved in the business. We helped the clients establish dynasty trusts to hold voting stock for the children involved in the business and to provide non-voting stock and other assets for the children who were not involved in the business, with parity for a child’s spouse who was involved in the business. This highly negotiated transaction resulted in a comfortable working arrangement for the entire family because all felt that they had been treated fairly.

We have also assisted owners of family businesses to structure tax-efficient transfers of wealth to younger generations. In one matter, the group assisted in the transfer of substantial blocs of stock in a family business into grantor-retained trusts (GRATs). We subsequently represented the family business owners in the sale of the business resulting in enhanced tax benefits to the business and its owners due to the prior estate planning.

Through the use of sales to grantor trusts, we effectively transferred 70 percent of the value of a closely held business worth between $30 million and $50 million to trusts for younger generations, resulting in family estate and gift tax savings of over $15 million. 

Through the use of GRATs, we assisted a family in transferring the majority of a closely-held family owned business from the second generation to the third generation, saving in excess of $5 million in transfer taxes.

We have helped create numerous private foundations, as well as many supporting organizations for clients with charitable inclinations. 

We assisted a family with a restructuring of family trusts so that the family lines where there were no grandchildren received early distributions that were not subject to the generation-skipping transfer tax, while the family lines with grandchildren received the assets that were exempt from the generation-skipping transfer tax. The tax savings associated with this transfer exceeded $10 million.