By: Dr. Tamara Patzer
October 12, 2026
In brief: When a business owner is told everything is fine, the next step is to ask better questions. This checklist of seven, drawn from the work of a New Orleans tax attorney and anchored in current IRS figures, helps owners near the top 1% find out whether their entity, tax and estate picture holds up.
Hearing that everything is fine is one of the more expensive moments in business. It can be true. It can also mean that nobody has asked the right question yet. New Orleans tax and estate attorney Todd M. Villarrubia, author of Entrepreneurial B.E.A.S.T. Mode™, builds his book around the questions that test whether an owner near the top of the income scale is really in good order. Here are seven that any owner can take to a licensed attorney and a tax professional.
Where Does My Income Sit Against the Top 1% Line?
For tax year 2023, a filer needed about $676,000 of adjusted gross income to be in the top 1%, according to the Tax Foundation’s analysis of IRS data1. Your own number may be well under it in a normal year and far over it in a year with a sale. Ask for both. Villarrubia’s opening point is that many owners are in the group without knowing it, because the threshold is lower than many believe.
Which Surtaxes Apply to Me?
The Net Investment Income Tax is 3.8 percent and applies when modified adjusted gross income passes $200,000 for single filers, $250,000 for joint filers or $125,000 for married filing separately2. Ask whether it applies, to which income and how an upcoming sale would change the answer. It is a separate calculation from the income tax brackets, and many owners meet it first on the largest return of their life.
How Is Each of My Entities Taxed?
This is the question that most often produces a pause. Villarrubia notes that “Every entity can be taxed differently depending on elections made with the IRS.” A company that was formed as one thing for legal reasons may be taxed as something else, and the election may no longer fit the owner’s situation.
Ask for a one-page list showing each entity, its state of formation, its owners, its tax classification and the date of the last change. If your advisers cannot produce it quickly, that is itself an answer.
What Will a Sale Cost in Tax, and When Is It Decided?
Long-term capital gains are taxed at 0, 15 or 20 percent, and an asset must be held more than one year to count as long term3. The IRS table for 2025 starts the 20 percent rate above $533,400 for single filers and $600,050 for joint filers3. The same IRS page lists higher maximum rates of 28 percent for collectibles and the taxable part of qualified small business stock, and 25 percent for unrecaptured section 1250 gain3.
Ask your advisers to model the sale on paper, and to tell you which choices must be made before it, since some cannot be made after. Villarrubia’s warning is blunt: “The wrong structure or a missed exemption can turn a lifetime of compounding into a government windfall instead of a family legacy.”
What Does My Estate Look Like Next to the Exclusion?
The IRS lists $15,000,000 per person as the federal basic exclusion amount for 20264. Ask for a rough estimate of your total estate, including the business, at a realistic valuation, and ask what is assumed. A company worth $40 million sits well past the exclusion even if the owner lives modestly. State rules differ and the federal figure can change with legislation.
Who Is Coordinating My Advisers?
If the answer is the owner, that is the risk. The book describes how fragmentation shows up in practice: “The estate attorney might structure a generation-skipping trust that conflicts with the family’s planned liquidity event.” Each adviser may be right in their lane, and the plan can still fail between lanes.
Ask who has the full picture and who calls whom. Villarrubia’s measure is simple: “the question is not whether they can afford coordination, but whether they can afford to operate without it”.
What Happens If I Cannot Run the Company Next Month?
Ask for the plan in writing. The book’s line on timing applies: “Advanced planning doesn’t begin at exit; it begins years before opportunity knocks.” A plan for a sale is one thing. A plan for an illness or a death is another, and it has to be written while everyone is calm.
How Should an Owner Prepare for the Meeting?
Bring documents, not impressions. A short folder is enough. It should hold last year’s returns, a list of entities with their owners and tax classifications, the latest company valuation or the basis for one, the current estate documents and a list of the advisers involved with contact details. Add one page describing what the owner wants to happen in three situations: a sale, an illness and a death.
Then ask each question and write down the answer, including the answers that begin with it depends. Those are usually the useful ones, since they show where a decision is still open. The aim is not to produce a perfect plan in one sitting. It is to find out which parts of the picture are solid and which rest on assumptions nobody has tested.
Villarrubia’s book makes the same point about timing in another way. The book’s emphasis on starting early applies here, since it is easier to ask these questions while nothing has gone wrong.
How Do You Ask the Questions Without Offending Anyone?
Frame them as housekeeping. Tell your advisers you are organizing your affairs and want a single picture of how the pieces fit. Most professionals welcome the request, because it makes their own work easier. Ask in writing, set a date for answers and offer to host a short call. If one adviser is reluctant to cooperate with the others, treat it as information about whether that relationship still fits your needs.
Common Questions
Should I ask all seven at once? No. Pick the two that worry you most and start there.
Who should answer them? Usually a licensed attorney and a tax professional together, since the answers overlap.
What if the answer is that everything is fine? Then the exercise cost an hour and gave you a record.
Sources
1. Tax Foundation, Who Pays Federal Income Taxes? Tax Year 2023
2. Internal Revenue Service, Topic no. 559, Net Investment Income Tax
3. Internal Revenue Service, Topic no. 409, Capital Gains and Losses
4. Internal Revenue Service, What’s New: Estate and Gift Tax
About the author. Dr. Tamara Patzer is a publisher and former newspaper editor. She was on the staff of The Charlotte Sun when it was named a 2005 Pulitzer Prize finalist for its Hurricane Charley coverage.
About the source. Todd M. Villarrubia is an attorney with an LL.M. in Taxation and a Juris Doctorate. He is an Accredited Estate Planner, a Board Certified Expert in Estate Planning and Administration, and a Fiduciary Investment Advisor Representative. He is the author of Entrepreneurial B.E.A.S.T. Mode™. Wealth Planning Law Group, 101 W. Robert E. Lee Blvd., Ste 404, New Orleans, LA 70124. Phone: 504-982-8207; email: todd@lawealthplan.com; website: lawealthplan.com.
Disclaimer: Attorney advertising. Sponsored feature written on behalf of Todd M. Villarrubia. This article is general information, not legal or tax advice, and reading it does not create an attorney-client relationship. Results vary.
