Estate Planning for Business Owners Under the 2026 Exemption
Updated September 5, 2026.
The federal estate and gift tax exemption did not drop in 2026. Legislation enacted July 4, 2025 established a $15 million basic exclusion per person for 2026, with inflation adjustments thereafter. There is no scheduled 2026 reduction under current law. An owner’s plan should reflect that change rather than a deadline that no longer applies.
Confirm what is actually available
Prior taxable gifts reduce the exclusion available at death. Married couples should not assume that one spouse automatically receives the other’s unused exclusion: portability generally requires a timely and properly completed estate tax return. State estate or inheritance taxes can apply under different thresholds and rules.
Focus on ownership, liquidity and the family
A valuable business can leave an estate with substantial obligations and little ready cash. Review how the company would operate after the owner’s death, who can make decisions, and where taxes, debts and family spending would be funded. Coordinate the estate documents with shareholder agreements and the intended succession plan.
Evaluate gifts on more than transfer tax
An irrevocable gift can move future appreciation outside the donor’s estate if properly structured, but it also gives up assets the donor may later need. Gifted property generally carries the donor’s income-tax basis, while property included in an estate can have a different basis result. Have counsel and the CPA compare those consequences before transferring a business interest.
Trusts and transfers of non-voting shares can be appropriate in some families. They do not create automatic valuation discounts or permanent freedom from transfer taxes. Governing documents, retained rights, independent valuation, generation-skipping transfer rules and ongoing administration need specific review.
Use the higher exemption to plan deliberately
Update business and personal asset values, confirm prior gifts, and test the plan against the family’s spending and succession goals. A larger federal exclusion can change the urgency of a transfer. It does not answer who should own the business, how the family will stay liquid or which responsibilities the next generation is ready to assume.
Sources for this update: IRS estate tax; IRS gift-tax questions.
Ascent Wealth Strategies provides strategies for financial/estate and/or tax planning. These strategies do not constitute tax or legal advise. Consult legal or tax professionals for specific information regarding your individual situation.
Clear Creek Financial Management, LLC dba Ascent Wealth Strategies is a Registered Investment Advisor. This case study is solely for informational purposes. Advisory services are only offered to clients or prospective clients where Clear Creek Financial Management, LLC and its representatives are properly licensed or exempt from licensure. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. No advice may be rendered by Clear Creek Financial Management, LLC unless a service agreement is in place.
