Family business succession planning for Charlotte owners

Takeaways

• The federal estate tax basic exclusion amount is $15,000,000 per person for deaths in 2026 and rises to $15,480,000 for 2027, according to the IRS.
• North Carolina has no estate tax; Session Laws 2013-316 repealed the state tax for estates of people who died on or after January 1, 2013.
• Deloitte Private’s 2026 report, based on a 2025 survey of 1,587 family businesses with at least $100 million in revenue, found 82% had some form of succession plan.
• PwC’s 2025 US Family Business Survey found succession planning affected 44% of US family firms in the past year, compared with 34% of family firms globally.
• Under SBA 7(a) rules effective October 1, 2026, an employee with at least 24 months in the business can buy a sole owner’s entire stake as an Owner Buyout.

This guide is for Charlotte-area owners who expect to hand a family company to a child, a relative, managers or employees within 10 years. Family business succession planning is the written process of deciding who will own and run the company and how ownership moves and gets paid for when the founder retires, becomes disabled or dies. The direct answer on timing: start years before the handoff, because IRS gift limits, SBA loan rules and North Carolina probate each add steps.

How many family businesses have a succession plan?

Most large family businesses have a succession plan of some kind, but only about half have a thorough one, according to Deloitte Private’s Family business succession planning and the next generation report, 2026. Deloitte surveyed executives at 1,587 family businesses worldwide from March to June 2025, each with at least US$100 million in revenue; 40% were in a leadership succession or expected one within 10 years. The top obstacles were a next generation that is “insufficiently qualified or lacks experience” (35%), difficulty identifying a successor (33%) and leaders reluctant to give up control (32%).

The PwC 2025 US Family Business Survey found succession planning affected 44% of US family firms in the past year, compared with 34% globally. Both studies have limits: Deloitte counted only $100 million-plus companies, and PwC’s US figure rests on 81 American respondents out of 1,325. Our read: a 40-person contractor in Matthews or a third-generation print shop in Gastonia is less likely than a Deloitte respondent to have a written plan.

How much is the federal estate tax exemption in 2026?

The federal estate tax exemption, which the IRS calls the basic exclusion amount, is $15,000,000 per person for deaths in 2026. The IRS estate and gift tax update page says Public Law 119-21, signed July 4, 2025, set that amount. Under 26 U.S.C. section 2010(c)(3), the amount is indexed for inflation for deaths after 2026. Portability lets the estate of the first spouse to die pass unused exclusion to the survivor on a timely filed Form 706.

IRS news release IR-2026-133, issued November 5, 2026, set the 2027 amounts:

IRS figure	2026	2027
Estate tax basic exclusion amount, per person	$15,000,000	$15,480,000
Annual gift tax exclusion, per recipient	$19,000	$20,000
Annual exclusion for gifts to a spouse who is not a U.S. citizen	$194,000	$201,000

In 2026 a Charlotte owner can give each child up to $19,000 of company shares or LLC units, valued at fair market value, without using any lifetime exclusion, as long as the gift is a present interest under 26 U.S.C. section 2503(b). A married couple can give $38,000 per child, but if only one spouse owns the shares, both spouses must elect gift splitting on Form 709. Under IRS rules, a gift recipient generally takes the giver’s tax basis, while inherited property follows different rules, so gifting low-basis stock can raise the heir’s capital gains bill later.

The IRS requires no estate tax return when the gross estate plus lifetime taxable gifts is $15,000,000 or less for a 2026 death, unless the family elects portability. Our read: below $15,000,000, cash and family control are the bigger problems. This guide is general information, not tax or legal advice; check your situation with a CPA and an estate planning attorney.

Does North Carolina have an estate tax?

North Carolina does not have an estate tax. The General Assembly repealed the state estate tax through Session Laws 2013-316, effective January 1, 2013, for estates of people who died on or after that date, according to Chapter 105, Article 1A of the North Carolina General Statutes.

Probate still applies: under N.C. General Statutes section 28A-3-1, an estate is administered in the county where the person was domiciled, so a Charlotte owner’s estate goes through the Mecklenburg County clerk of superior court. Ask a North Carolina estate attorney whether a revocable trust would let shares skip probate.

What should a family buy-sell agreement cover?

A buy-sell agreement is a contract among a company’s owners that sets who may buy a departing owner’s shares, at what price, and on what payment terms. A sound family agreement covers four points:

• Death, long-term disability, retirement, divorce and departure from the company each trigger a buyout by the company or the other owners.
• The price comes from a fixed amount updated every year, a formula, or an appraisal by an ASA, ABV or CVA credentialed appraiser at the time of the event.
• Payment comes from life insurance proceeds, a promissory note, or both.
• Transfers to outsiders, including in-laws, require the written consent of the other owners.

Under 26 U.S.C. section 2703, federal estate and gift tax valuation disregards a buy-sell price unless the agreement is a bona fide business arrangement, is not a device to transfer the business to family for less than full value, and has terms comparable to arm’s-length deals. A formula price set low to shrink a parent’s taxable estate can fail that IRS test.

Life insurance usually funds a buyout at death. Under 26 U.S.C. section 101(j), an employer-owned policy, including key-person coverage, keeps its tax-free death benefit only if, before the policy is issued, the employee is told in writing about the coverage and its maximum face amount, gives written consent, and is told the employer will be a beneficiary. Without that paperwork, section 101(j) caps the tax-free amount at the premiums paid.

Should the next owner be family, managers or an ESOP?

The next owner can be a relative, managers, an outside buyer or an employee stock ownership plan. An ESOP is an IRC section 401(a) qualified defined contribution plan designed to invest primarily in the employer’s stock, according to the IRS ESOP page.

C corporation owners get a federal tax incentive to sell to an ESOP. Under 26 U.S.C. section 1042, a seller can defer gain when the ESOP owns at least 30% of the stock right after the sale, the seller held the shares at least 3 years, and the seller buys qualified replacement property between 3 months before and 12 months after the sale. For sales through 2027, the deferral covers only domestic C corporation stock with no public market; for sales after December 31, 2027, the SECURE 2.0 Act lets S corporation shareholders defer gain on up to 10% of the amount realized.

Not every family business should pass to family. If no relative wants the CEO job, a sale to managers, an outsider or an ESOP can protect the founder’s retirement; Deloitte’s respondents expect the share of family businesses with an external CEO to double from 13% to 26% after succession.

How can a family member or manager finance a buyout?

A family member or manager can finance a buyout with an SBA 7(a) loan, a seller note, gifts, or a mix. The SBA caps a 7(a) loan at $5 million, and its lending rules, SOP 50 10 8.1 effective October 1, 2026, set these terms for buyouts by employees, family owners and ESOPs:

• A sole owner can sell 100% of the company to an individual employed there at least 24 months before the SBA loan application.
• A selling parent who keeps less than 20% after a partial sale must guarantee the full SBA loan for at least two years after final disbursement.
• The SBA minimum equity injection for an Owner Buyout is 10% of the purchase price, and the lender may reduce or waive it if the company has enough liquidity and working capital and did not show a negative net worth at its last fiscal year-end.
• A child or manager who has not worked in the business for 24 months can buy less than 50% as an Owner Buyout; a larger stake is underwritten as an Initial Acquisition, with a 10% equity injection the lender cannot reduce.
• A seller note counts toward the buyer’s equity only on full standby, with no payments for the term of the SBA loan, and can cover no more than half the required injection.
• An ESOP buying 51% or more of the company can use a 7(a) loan with no SBA equity injection requirement.
• Every owner after the sale, including a parent who keeps shares, must be a U.S. citizen or national living in the United States, so a green card holder among the owners rules out a 7(a) loan.

Gifts and loans can work together: a parent can give shares each year under the annual exclusion and sell the rest through an SBA-financed buyout. Put the CPA and the SBA lender in the same meeting before anyone signs.

What does a family business succession timeline look like?

A family business succession timeline runs in stages, and the first stages take the longest. Our read on a workable order for a Charlotte family company:

1. Write down the owner’s goals for retirement income, control and timing, and share them with the family.
2. Get a current valuation from a credentialed appraiser so gifts, buyouts and insurance use the same number.
3. Pick the successor for management and decide separately who will own the shares.
4. Sign or update the buy-sell agreement and buy the insurance that funds it.
5. Give the successor a title, a budget and a performance review years before the founder leaves.
6. Update wills, trusts and powers of attorney to match the business plan.

Deloitte’s 2026 report found 44% of the family businesses it surveyed require next-generation members to hold formal roles with performance management, and 40% require outside work experience before a relative joins.

Where can Charlotte owners get free succession help?

Charlotte owners can get no-cost counseling from the SBTDC at UNC Charlotte and free mentoring from SCORE Charlotte. The North Carolina Small Business and Technology Development Center lists Business Transition Counseling Services on the SBTDC Transition page for owners who need a succession plan or a valuation, and basic SBTDC counseling is free.

Mentoring at SCORE Charlotte “is always free, for the life of your business,” according to the chapter, which also covers York, Lancaster, Chester, Chesterfield and Cherokee counties in South Carolina.

Good to know

Figures here were checked on November 13, 2026; several change on set dates:

• The IRS basic exclusion amount rises to $15,480,000 and the annual gift exclusion to $20,000 for calendar year 2027, according to IR-2026-133.
• An estate tax return on IRS Form 706 is due nine months after death, with an automatic six-month extension available.

Last updated November 13, 2026.

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