This past July, the One Big Beautiful Bill Act (the “Act”) was enacted, completely altering the landscape of tax and estate planning for business owners. One of the most significant changes? A permanent increase to the federal gift and estate tax exemption.
Yes, you read that right, permanent.
Under the new law, individuals can now transfer up to $15 million tax-free during their lifetime or at death. For married couples, that amount doubles to $30 million. These exemption limits will also increase over time to account for inflation. This is a major shift from past rules that greatly benefits business owners- particularly those who can now establish a tax-free estate under the Act.
So, what does this mean for business owners?
If you own a business and your current succession plan was created under previous laws, like the Tax Cuts and Jobs Act, it may no longer offer the best tax benefits. You could be missing out on significant savings and opportunities to protect your wealth and business assets from unnecessary taxation. With the increased exemption, there's now an opportunity to restructure your estate plan to take full advantage of these more favorable tax rules for the benefit of both your business and your family.
