For business owners, 2026 has brought a rare sense of legislative “certainty.” With the One Big Beautiful Bill Act (OBBBA) cementing the federal estate tax exemption at $15 million per individual, many entrepreneurs feel the pressure is off.
However, as Attorney Adam Brown, I warn my clients: tax planning is only one pillar of a legacy. Without a coordinated succession strategy and a modernized buy-sell agreement, your business could still face a “liquidity crisis” or a family feud that no tax exemption can fix.
The “Connelly” Warning for Buy-Sell Agreements
One of the most critical updates for 2026 involves how we fund buy-sell agreements. Following the landmark Connelly v. United States ruling, the Supreme Court changed the math on business-owned life insurance. If your company owns the policy used to buy out a deceased partner’s shares, those proceeds may now inflate the total value of the company for estate tax purposes.
To avoid an accidental tax bill or a valuation dispute, we are currently helping clients transition from “Entity-Purchase” plans to “Cross-Purchase” arrangements or specialized Insurance LLCs.
Aligning Entity Structure with Succession
Is your business an LLC, an S-Corp, or a C-Corp? Your entity structure dictates how easily you can transfer “non-voting” interests to the next generation. By utilizing Family Limited Partnerships (FLPs) or voting/non-voting stock splits, you can:
• Pass equity to heirs today to freeze their future appreciation.
• Retain 100% management control while you are still at the helm.
• Protect business assets from personal creditors or divorce.
Succession is Not Just “Who Gets the Keys”
A true succession plan answers the hard questions: If you are incapacitated tomorrow, who has the Power of Attorney to sign payroll? Does your Buy-Sell agreement trigger upon disability, or only death?
Next Step: Your business is likely your largest asset—don’t leave its future to default state laws. Contact Attorney Adam Brown today to align your business entity with your 2026 estate plan.