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.
Buying Commercial Property in New Jersey: Legal Guide for Small Businesses
Small businesses considering buying commercial property in New Jersey must evaluate a range of legal, financial, and operational factors. While ownership can offer long-term value and control, it also introduces significant risks if not properly structured. This guide outlines key considerations to help New Jersey business owners make informed decisions, minimize legal exposure, and successfully […]
The SEC’s Latest Guidance on Applying Federal Securities Laws to Tokenized Securities
On January 28, 2026, staff of the U.S. Securities and Exchange Commission’s Divisions of Corporation Finance, Investment Management, and Trading and Markets issued a joint statement clarifying how existing federal securities laws apply to tokenized securities. The SEC’s “Statement on Tokenized Securities” does not establish new law, but it does provide greater clarity on the […]
Common Legal Mistakes NYC and New Jersey Business Owners Make
Operating a business in the New Jersey and New York City metropolitan region offers incredible opportunities, but it also requires navigating a dense and highly regulated legal environment. From entity formation to regulatory compliance, seemingly minor legal oversights can expose business owners to significant risk. In our work with businesses throughout the region, our attorneys […]
High-profile founder litigation is more than just a media spectacle. For startup founders, these cases underscore the legal and structural risks that can arise when rapid growth outpaces formal oversight. While launching a new company can be both an exciting and deeply rewarding endeavor, founders must be mindful that it also comes with significant risks. […]
Corporate Governance Reviews: A Practical Guide for New Jersey Companies
Every New Jersey company should periodically evaluate its governance framework. Strong corporate governance protects directors and officers, builds investor confidence, reduces litigation exposure, and positions a company for sustainable growth. The first quarter of the year is a great time to evaluate your corporate governance practices and perform any routine maintenance needed to keep that […]
What to Do After Being Served with a Lawsuit: Steps to Protect Your Legal Rights
Being served with a lawsuit is one of the most stressful legal events a business or individual can face. Whether the claim involves a contract dispute, an employment matter, an intellectual property issue, or another legal challenge, the actions you take in the first few days can significantly shape the outcome of your case. Acting […]
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