Use of Blind Trusts to Protect Against Claims of Insider Trading

If your client is an insider of a company and wants to sell company stock while protecting against claims of insider trading, a traditional approach has been to create a Rule 10b5-1 plan (10b5-1 plan). [...]removed is the normal day-to-day, minute-to-minute sensitivity to market and general economic...

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Bibliographic Details
Published in:Trusts & Estates 2022-12, p.12
Main Authors: Marchesani, Darlene M, Kirk, Bryan D
Format: Article
Language:English
Subjects:
Economic conditions
Estimated taxes
Initial public offerings
Sales
Small business
Standard of care
Online Access:Get full text
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Summary:If your client is an insider of a company and wants to sell company stock while protecting against claims of insider trading, a traditional approach has been to create a Rule 10b5-1 plan (10b5-1 plan). [...]removed is the normal day-to-day, minute-to-minute sensitivity to market and general economic conditions when selling a large stock position. The trustee has freedom, but the trustee's burden is to follow the terms and purpose of the trust and the standard of care required by the trust instrument and applicable law. Is there special tax planning that your client needs to incorporate into the plans — for example, is the stock qualified small business stock (QSBS) eligible for a special exclusion from capital gains tax on sale?
ISSN:0041-3682