Closely held businesses differ from their publicly held counterparts in the relative importance assigned to planning for estate taxes. When faced with the prospect of an estate taxes liability, owners of closely held businesses may alter their investment behavior. This essay presents a simple model of the investment decision in a closely held business. While finance theory prescribes that firms maximize their value through funding capital projects with positive net present values, this model suggests that the presence of estate taxes may induce the firm to reject projects which, if funded, would add value to the firm. Further, the propensity to pass on value-adding projects increases with both the estate tax rate and the age of the business owner.