A strong succession plan will center not only around grooming heirs to take on key business functions, but also around estate tax planning. The current estate tax law allows individuals to avoid taxes on estates valued at no more than $5.25 million, or $10.5 million for spouses who file jointly. In addition, the gift tax enables individuals and business owners to gift up to $14,000 – or $28,000 for joint filers – to as many individuals as they wish. Keeping these two exemptions in mind, business owners may have more leeway when it comes to establishing a succession plan that keeps their tax liability low.
The first step is to hire an appraiser to conduct a business valuation. When business owners don’t know the true value of their assets, tax planning becomes more challenging and their estates may be forced to pay out more in taxes than the company head intended. Once the true value is determined, owners can make more informed decisions about managing their affairs. As an example, businesses that are high in value will undoubtedly be subject to more taxes, and owners can avoid this scenario by gifting assets to successors to reduce their taxable estate.
Gifts can be made in the form of real estate, cash, investments, and other business property on a tax-free basis. This method can also be particularly impactful if owners plan to have several successors, as it allows them to transfer larger chunks of their business to heirs. In addition to gifting, owners might also consider setting up a trust for successors that enables them to manage or monitor certain business functions and investments and provide guidance to beneficiaries.
When Are New Jersey Business Owners Personally Liable for Corporate Debt?
New Jersey personal guaranty liability is a critical issue for business owners who regularly sign contracts on behalf of their companies. A recent New Jersey Supreme Court decision provides valuable guidance on when a business owner can be held personally responsible for a company’s debt. Under the Court’s decision in Extech Building Materials, Inc. v. […]
Commercial real estate trends in 2026 are being shaped by shifting economic conditions, technological innovation, and evolving tenant demands. As the market adjusts to changing interest rates, capital flows, and workplace models, investors, owners, tenants, and developers must understand how these trends are influencing opportunities and risk in the year ahead. Overall Outlook for Commercial […]
One Big Beautiful Bill: New Tip Income Tax Rules Employers & Workers Need to Know
Part 2 – Tips Excluded from Income Certain employees and independent contractors may be eligible to deduct tips from their income for tax years 2025 through 2028 under provisions included in the One Big Beautiful Bill. The deduction is capped at $25,000 per year and begins to phase out at $150,000 of modified adjusted gross […]
One Big Beautiful Bill: New Overtime Tax Rules Employers and Employees Need to Know
Part 1 – Overtime Pay and Income Tax Treatment Overview This Firm Insights post summarizes one provision of the “One Big Beautiful Bill” related to the tax treatment of overtime compensation and related employer wage reporting obligations. Overtime Pay and Employee Tax Treatment The Fair Labor Standards Act (FLSA) generally requires that overtime be paid […]
New York’s FAIR Business Practices Act: What the New Consumer Protection Measure Means for Your Business
In 2025, New York enacted one of the most consequential updates to its consumer protection framework in decades. The Fostering Affordability and Integrity through Reasonable Business Practices Act (FAIR Act) significantly expands the scope and strength of New York’s long-standing consumer protection statute, General Business Law § 349, and alters the compliance landscape for New York […]
How to Reduce Legal Risk as Your New Jersey Business Grows in 2026
For many New Jersey businesses, growth is a primary objective for the New Year. However, it is important to recognize that growth involves both opportunity and risk. For example, business expansion often results in complex contracts, an increased workforce, new regulatory requirements, and heightened exposure to disputes. Without proactive planning, even routine growth can lead […]
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.
Let`s get in touch!
Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!
