The higher federal estate tax exemption creates more room for wealth transfers, but owners still need to consider their own financial needs, the company’s ability to keep operating, and the readiness of the people who will run it.
In PwC’s 2025 Global Family Business Survey, 78% of respondents identified safeguarding the business as a top long-term goal. Putting that priority into practice means evaluating how a transfer will affect both the owner’s financial security and the company’s ability to keep operating successfully.
The Owner’s Future Financial Needs Come First
When making gifting decisions, the primary factor beyond tax should be the owner’s future financial needs. You don’t want to pay an estate tax, but your lifestyle, needs, and goals require more funds left in your estate. That’s more important.
You have one life. You’ve spent all of it building your business, making it valuable, and giving those who succeed you the opportunity to grow it further. You deserve to hit your goals, within reason and within the plan.
Let’s make sure the plan addresses this first and foremost.
Cash Flow Is Critical to a Successful Transfer
The next factor to consider when making gifting versus sale decisions is cash flow, which not only supports the owner’s future financial needs but also protects the company, or the golden goose.
If we make decisions that crush the company’s cash flow, we’re killing the golden goose. If the company can’t afford to run itself, it won’t matter if the heirs are ready or treated fairly. The rest of the planning is for naught. This is why we have to protect the business.
Consider Family Readiness, Control, and Fairness
Finally, owners need to consider family readiness, control, and fairness among children. Family readiness comes first in this list because it protects the golden goose.The family can kill the business if they aren’t ready to run it.
Control comes next. We can further protect the golden goose by making sure that only operators have control of the company. Fairness among children comes at the very end because we have so many ways to achieve this.
When Fairness Comes at the Expense of Control
Unfortunately, even technically sound tax decisions can create unintended problems for the family or business, and the biggest and most common problem I see in that realm occurs when tax planning and fairness to children don’t take control into consideration.
Saving money on taxes and treating children fairly won’t matter if the next generation is unable to run the company. Instead of making decisions, they become non-operating heirs. This is a recipe for disaster. Even if the operators grow the company tenfold, the heirs won’t get a fair economic benefit.
