We've recently taken over our family business. My parents have “retired” but still stick their noses in “our” business [actually, we really welcome their help.] Should my folks be employed on a formal basis in order for us to include them in our MERP?by Tom Luker on 05/01/15
- This can frequently happen in a family farm where the business might be sold to the kids with them leasing part or all of the land from the folks who still live next door.
- Or, the parents/grandparents might move to warmer climes and return to help during seasonal periods and/or provide help from afar. They could be legitimately employed and be made part of the MERP.
- One of our clients is a Christmas tree producer whose dad moved to Texas. The father returned periodically to help. He also provided consultation assistance while in Texas. He could have been included in the MERP.
- One advantage of growing older is that even the premiums for Medicare that come off the Social Security check are eligible for a MERP.
- Some “macro-sized” businesses include continuing benefits for retirees. This can be written into your MERP Adoption Agreement to make it part of a “micro-sized” biz fringe benefit “package” – just be careful that the definition of a “retiree” is clear and is a reward for loyal service.
- However, you don’t want to obligate yourself to expensive obligations in the future for non-family EEs. The Adoption Agreement can be revised annually to fit your needs.
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