Within the past year, we’ve seen major changes in the tax world, and some affect family offices. For those who may be unfamiliar with family offices, a family office is a private company established for the sole purpose of managing a high-net-worth family’s wealth. In addition to the family’s investments, a family office may also offer estate planning, tax advisory and preparation, real estate management, and even concierge coordination services. While there is no minimum requirement for setting up a family office, the median assets managed by a family office was $476 million, with 33% of family offices serving families with assets exceeding $1 billion.

4 Tax Changes and How They Impact Family Businesses

The One Big Beautiful Bill Act (OBBBA) included the following provisions that pertain to the world of family offices:

• Estate and gift tax threshold: The $15 million threshold ($30 million for married couples) for the lifetime estate and gift tax exemption was made permanent. This is a significant increase from $13.99 million ($27.98 million for married couples) in 2025. As a result, this will require a greater emphasis on estate planning strategies to transfer significant wealth while minimizing tax burdens. If existing trusts are set in place, family offices can use this opportunity to evaluate the current structure of the trust to maximize the benefits of available exemptions.
• AGI floor for charitable contributions: A 0.5% adjusted gross income (AGI) floor was introduced for charitable contributions while making the 60% AGI limit permanent. Many high-net-worth families are involved in philanthropic efforts. With the introduction of the 0.5% AGI floor, these families will most likely experience a significant decline in deductible charitable contributions. Family offices should make their clients aware of this impact and consider strategies to mitigate its effect such as accelerating contributions during lower-income years to reduce the impact of the AGI floor.
• Bonus depreciation: The 100% bonus depreciation was restored. High-net-worth families often engage in multiple business enterprises and real estate investments. With the restoration of 100% bonus depreciation, family offices can fully deduct eligible improvements and fixed assets. As a result, the need for cost segregation studies is expected to increase for properties placed in service after Jan. 19, 2025.
• Tiered exclusion on qualified small business stock (QSBS): Taxpayers may now exclude 50% of gains for shares held more than three years, 75% of gains on shares held more than four years and 100% for shares held more than five years. The exclusion cap increases from $10 million to $15 million indexed for inflation annually beginning in 2027. Family offices should evaluate the current structure of business operations. Collaborating with estate planners and firms that leverage the QSBS rules can enhance the value of the services family offices provide. With the changes in QSBS rules, the pool of investments expands, increasing the need for strategic planning and structure.

For family offices, the importance of serving high-net-worth families cannot be understated. Ensuring that they are providing exceptional service and remaining current on industry trends and tax law updates is essential to the long-term success of the firm.