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.
What Every Real Estate Investor Should Know Before Buying a Rental Property
Before buying a New Jersey rental property, an investor should verify realistic operating numbers, the property’s legal and regulatory status, lead-based paint and flood compliance, the existing leases and tenant protections, and the right ownership structure. A rental property is more than a piece of real estate; it is an operating business subject to legal, […]
Can You Change an Irrevocable Trust in New Jersey?
In New Jersey, an irrevocable trust can sometimes be modified even though its name suggests otherwise, and one of the primary tools for doing so is a process called decanting. Whether decanting is available depends on the specific terms of the trust and the discretion given to the trustee. Key takeaways: New Jersey has no […]
How Intellectual Property Valuation Will Impact Business Transactions
Intellectual property valuation determines the monetary value of a business’s IP assets, and it drives outcomes in licensing deals, joint ventures, mergers and acquisitions, financing, and ownership disputes. The most valuable assets of a business are often the things that cannot be seen or touched: a proprietary process, a copyrighted work, brand recognition, or the […]
Data Center, Dark Fiber, and Lit Services Agreements in New Jersey: Key Terms and Legal Pitfalls
For New Jersey data center owners and operators, a service agreement may look routine when it is signed. The network is functioning, the vendor is meeting its installation schedule, and the parties have agreed on pricing and performance specifications. The provisions that seem most important at that stage are often the technical ones. That changes […]
Fort Monmouth Redevelopment and the Transformation of Monmouth County Real Estate
The Fort Monmouth redevelopment has entered its execution phase, and it is repositioning the broader Monmouth County real estate market. When Netflix and the Fort Monmouth Economic Revitalization Authority closed on the 292-acre Mega Parcel in December 2025, the transaction did more than hand over a deed. It marked the moment Fort Monmouth stopped being […]
Local Zoning and Land Use Rules Every New Jersey Rental Property Owner Should Understand
Owning a residential rental property in New Jersey involves more than finding tenants and collecting rent. Property owners must comply with a combination of state laws, municipal ordinances, building and housing codes, and zoning and land use regulations. These requirements can affect everything from the number of dwelling units permitted at a property to whether […]
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