Estate Overview

A collection of strategies to help business owners keep more of their wealth.

Key numbers

The Earnings section covered taxes on income. The Investments section covered taxes on growth. The Legacy section covers what happens to everything you've built when you're gone.

There are two main tax events to plan around at death:

1. Estate tax

If your taxable estate exceeds the exemption — $15M per person, $30M per couple in 2026 — the IRS takes 40% of the excess. That's a steep rate on wealth you've already paid income and capital gains tax on once. For a business owner earning $750,000 annually and compounding for decades, reaching $15M is a real possibility, not a theoretical one. The strategies in this section are mostly about transferring wealth out of your estate before that happens.

2. Income tax on retirement accounts

Traditional IRAs and 401(k)s never got taxed on the way in, so they have to be taxed on the way out. When you leave these accounts to non-spouse heirs, they must withdraw the entire balance within 10 years and pay ordinary income tax on every dollar. On a $2M inherited IRA, heirs could face $740,000 or more in federal and state income taxes. This is the income-in-respect-of-a-decedent (IRD) problem, and it's often overlooked in estate planning.

What the Legacy section covers

• Step-Up in Basis — The most passive, high-value strategy in the code
• Exclusion Gifting + 529 Superfunding — Transferring wealth out of the estate while alive
• Insurance — How life insurance fits into estate and income replacement planning
• Avoiding Probate — How to ensure assets transfer quickly, privately, and at low cost
• Core Documents — The foundation everything else sits on

You don't need to implement every strategy. You need to understand which ones apply to your situation, implement the ones that do, and revisit them as your estate grows. That review should happen with your estate planning attorney and CPA together — the strategies here sit at the intersection of tax law and estate law, and they need both perspectives.