Localized Estate Planning Considerations for Small Business Owners in the OBBBA

You’ve poured your energy, time, and money into building your business. And if you’re like other business owners, much your wealth might reside in illiquid assets in your company. One thing you don’t want is the estate tax eroding the value you’ve created, whittling down your wealth, and jeopardizing your succession plans. My partner, Louis Barajas, and I have worked with countless business owners, and we’ve learned that without careful planning and strategies, you could end up doing just that.  

With the recent passage of the  One Big Beautiful Bill Act (OBBBA), I wanted to revisit what to consider when designing your estate and succession strategy considering new features in the recent law, namely the expanded Qualified Small Business Stock (QSBS) benefits, permanent 199A deductions, and raised estate and gift tax exemptions.  

At International Private Wealth Advisors, we help small business owners shape how they plan for their business exit and intergenerational transfers.  

Let’s get into it.  

4 Key Tools for Tax-Efficient Business Succession 

Note that some of the tax changes in the OBBBA aren’t set to take effect until July 2026. But even so, now is the perfect time to start planning.  

(1) Expanded Qualified Small Business Stock (QSBS) Relief. If your business is a C-Corp, the QSBS changes in the OBBBA might be a game-changer. Under the expanded QSBS rule, which is in effect for QSBS acquired after the law was signed on July 4, 2025, the asset cap was raised to $75 million (adjusted for inflation), up from $50 million. This increase might allow more businesses to benefit, especially in high-cost sectors like tech or biotech. 

Also of note, the gain exclusion cap for QSBS issued after July 4, 2025 has been increased to $15 million from $10 million.  

Lastly, the law introduces tiered, earlier tax-free gains: 50 percent tax-free after three years, 75 percent after four years, and 100 percent after five years.  

Basically, this expanded QSBS relief can make earlier business exits that monetize your growth possible.  

(2) LLCs, Gifting, and Estate Limits. The OBBBA permanently raised the estate, gift, and generation-skipping tax exemption (up to $15 million for individuals and $30 million for married couples to take effect in 2026). Because of this, you might have more flexibility to maximize annual gift exclusions during your lifetime, use lifetime exemptions strategically (especially when talking about transferring shares of your business), and utilize Family Limited Partnerships (FLPs) or LLCs for valuation discounts, continued control, and transfer efficiency.  

(3) Enhanced Business Deductions and Immediate Expensing. The OBBBA revived and supersized some tax strategies, including full expensing on capital investments and domestic R&D costs. This could be retroactive to 2022 for businesses that are under approximately $31 million in receipts. The law also raised the Section 179 expensing threshold to $2.5 million (with a phase-out beginning at $4 million) indexed for inflation. It also increased the interest deduction limits, which might lessen borrowing costs.  

These tools can help you improve your cash flow and reinvestment capacity, which is critical if you’re scaling or planning a business transition.  

(4) Guaranteed QBI Deductions via Section 199A. The new law makes the 20 percent deduction on qualified business income (QBI) permanent for pass-through entities like S-Corps, LLCs, and partnerships. It also lifts the threshold limits so it won’t sunset at the end of 2025.  

The Bottom Line 

While the OBBBA provides a potential tax-saving opportunity, the tax implications for your specific situation might be complex. We recommend consulting with a financial or tax professional to build tailored strategies. 

Planning for both taxes and succession should start early, and coordinate across entity structure, gifting, and business planning. Like us, we know you don’t want to just pass on a business, you want to leave a legacy. Let us help you do that. Get in touch with us to help you build a plan that is aligned with your values and goals.