The New Federal Threshold As we enter 2026, the legislative landscape for family-owned land and industrial assets has shifted. With the passage of the One Big Beautiful Bill Act (OBBBA), the federal estate tax exemption has been adjusted to $15 million per individual (and $30 million for married couples). While this “permanent” increase provides temporary relief, it also creates a narrow window for high-value estates—particularly those with appreciating timberland and mill infrastructure—to lock in valuations before future political shifts.
Leveraging IRS Section 2032A:
The Special Use Shield For families whose wealth is “locked” in land and machinery, the threat of being “asset-rich but cash-poor” is real. At S&A Trust, we specialize in qualifying estates for IRS Section 2032A (Special Use Valuation). This allows a family mill or farm to be appraised based on its actual industrial/agricultural use rather than its “highest and best use” (such as residential development). When properly structured within a Trust, this can reduce an estate’s taxable value by nearly $1.4 million (the 2026 inflation-adjusted limit), effectively insulating the heirs from a forced liquidation.
Case Study Snapshot
The 2026 Succession Audit A multi-generational milling operation in the Hanover corridor faced a projected 40% tax hit on its “Developmental Value” due to its proximity to expanding suburban zones. By implementing a Succession Audit and formalizing their Material Participation under the S&A Trust Charter, the family successfully triggered a Section 2032A election. This moved their valuation from $18M (Developmental) to $14M (Industrial Use), bringing the entire estate under the new $15M exemption and preserving the facility for the fourth generation without a single acre being sold.
Author Bio
Authored by Jamiel Cotman, Principal Trustee of S&A Trust. With an extensive background in utility infrastructure and industrial logistics, Mr Cotman bridges the gap between raw land stewardship and the high-stakes world of mill operations. He manages S&A Trust with a focus on institutional-grade asset protection for the American landowner.
Citations
- Congressional Research Service: Economic Impacts of the 2026 Estate Tax Sunset (OBBBA Update)
- IRS Section 2032A: Special Use Valuation for Real Property (2026 Technical Guide)
- ASFMRA: Guidelines for Rural and Agricultural Asset Valuation
- S&A Trust Internal Standards: The 100-Year Regenerative Mandate