Estate Planning for Business Owners
Your estate plan and your business documents need to agree. Who inherits the company, who can run it and how a transition is funded are separate decisions.
We review the operating or shareholder agreement, transfer restrictions and any buy-sell arrangement alongside the estate documents. The plan should address who can receive the interest, how it is valued and where purchase funding would come from.
Management deserves a separate review. Identify who could handle payroll, banking, contracts and other decisions during incapacity or after death, and confirm the authority the entity documents and institutions require.
Transferring an interest can affect control, cash flow, gift and estate tax, and the income-tax result of a later sale. A transfer before a letter of intent is not automatically effective or tax-favored. The transaction facts and the rights retained need review with tax counsel, the CPA and a qualified appraiser where appropriate.
For gain calculations, gifted property generally carries the donor's adjusted basis, while inherited property's basis is generally tied to its date-of-death value, subject to exceptions. A possible estate-tax benefit should be weighed against the basis and other consequences before a recommendation.
A child working in the business and one pursuing a different career may need different arrangements. Consider voting rights, management responsibilities, liquidity and the other assets available, without assuming that equal ownership produces a workable outcome.
For illustration only: one child may manage the business while both children benefit economically. The agreements would need to address decision-making, distributions and a way to resolve disputes. The appropriate structure depends on the family and company.
Legacy Counsel is the estate-planning practice of Jacobs Counsel LLC. Where business, real-estate or tax work is needed, the engagement identifies the responsibilities and any additional advisors.
Sources checked September 7, 2026: IRS Publication 551: basis of assets. Basis rules have exceptions; the tax and transaction analysis must fit the proposed transfer.
An ownership summary, existing entity and buy-sell documents, the current estate plan, and an outline of any anticipated transition are useful. Do not send confidential documents through the public inquiry form.
Start while there is time to assess options. There is no universal safe period or letter-of-intent cutoff that guarantees a tax result; the transaction and transfer facts control.
Yes. Residence, property location and the business's governing documents can raise different state-law questions. We identify those connections and coordinate local counsel where needed.
Begin with the complimentary fit-and-intake call with Jamee, or book a paid attorney strategy session with Drew.
Drew Jacobs is licensed in New York, New Jersey, and Ohio. Nothing on this page constitutes legal advice or an offer to represent you in a jurisdiction in which we are not licensed.