Business owners may already be aware of the upcoming sunset of the federal gift and estate tax exemption. There is still a possibility that Congress may act, otherwise the current lifetime exemption amount will end on December 31, 2025.
This tax change is most impactful for people with a net worth greater than $14 million. That could include business owners who intend to sell or exit their company in the next year and a half.
Depending on the value of the business, this could tip you over the $14 million joint gross estate threshold. At that point, every dollar above your lifetime exemption amount is taxed at 40% after you pass away.
Although January 2026 may seem far away, for business owners who are contemplating putting their company on the market very soon, this could actually be a major issue. A business brings with it opportunity, but also the need for advanced planning assistance. If you don’t have a business succession plan, it’s well worth the effort to sit down with the help of a Pasadena lawyer to work through the options.
By documenting your succession strategy and/or plan for sale well in advance, you’ll be in a better position to ensure these steps are followed properly if and when they are needed. Waiting until you’re ready to depart the business in the near future can put pressure on this and lead to unnecessary delays in deciding who will stay in the business vs who needs to be hired or trained up to take things over.
If you have ever been involved in the process of closing out someone else’s probate, you know how challenging it can be if the paperwork and planning was not done in advance. You can make this difficult process easier for your loved ones with some advanced planning. A lawyer can advise you about all aspects of estate planning, including if you need something like a will or something more complex.
The cost and length of the probate process can be problematic for your entire family. Working with a Pasadena estate planning lawyer is one of the best ways to minimize these impacts and to ensure the most streamlined transition of your assets possible.
If you still have more questions about this process, our lawyers can walk you through what to expect and answer those questions for you.
If you’re concerned about getting a conservatorship for someone in California, California has set up a time to speak with our Pasadena estate planning lawyers.
