Preparing your business to avoid estate tax can be complicated. There are several considerations involved, including business structure, succession planning, planned gift-giving, and obtaining life insurance policies. A dedicated estate tax planning lawyer could help you create a strategy to address estate tax concerns.
Estate taxes, sometimes called “death taxes,” are a tax on the right to transfer property after death. While Florida does not have an estate tax, your estate may be subject to federal estate tax. Only the value of the estate greater than the lifetime exemption amount will be subject to estate taxes.
As of 2025, the individual exemption is $13,990,000. Under current law, the exemption is scheduled to drop to about $7,000,000 on January 1, 2026, unless the law is changed by the federal government before then. The federal estate tax also includes the federal gift tax, meaning you do not pay the gift tax during life, if the gift is under the exemption limit, but at death, any gift over the lifetime exemption limit is included in the value of your taxable estate. In addition to the lifetime exemption, you may also make annual gifts. In2025, the annual gift exclusion limit is $19,000.
Preparing your business to avoid estate taxes after you die can preserve assets and secure your legacy. There are several options to minimize or avoid estate taxes, and you will want to identify the appropriate tools and strategies for your estate and business.
Estate tax planning may be incorporated into a business succession plan. Tools like trusts, gifting, and employee stock ownership plans may help to reduce or eliminate estate tax obligations. To do so, a well-structured and comprehensive plan is necessary.
The tax strategy benefits of charitable giving are twofold. Charitable giving is a useful tool for reducing your taxable estate. Gifts under the annual gift exemption limit are not counted toward the lifetime exclusion and will not be subject to gift tax. Moreover, individuals and businesses may utilize charitable contributions to reduce taxable income.
A life insurance policy can help pay the amount owed under estate tax obligations. These policies can be used to pay tax obligations without reducing estate assets. If your goal is to preserve wealth for the next generation, purchasing a life insurance policy may be prudent.
Preparing your business to avoid the estate tax is vital to securing your wealth, legacy, and company’s future. A business succession and estate tax planning attorney at Veliz & Associates, P.A. could help you identify the appropriate strategies for your business. Consult with us today to learn what you should do.
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