Planning for a Business Exit or Liquidity Event

The Most Important Planning Happens Before the Transaction Closes

A business sale or liquidity event is likely the single largest financial transaction of your life. It is also the moment where the gap between proper planning and inadequate planning is measured in millions of dollars—in taxes paid, in wealth preserved, and in the flexibility you retain for the decades that follow.

The critical truth about exit planning: the vast majority of your best options expire the moment the deal closes. Trust structures, gifting strategies, charitable planning techniques, and entity restructuring must be in place before the transaction—often months or years before—to be effective. If you are contemplating a sale, a merger, a recapitalization, or any event that will convert illiquid business interests into liquid wealth, the time to engage legal counsel is now. Not after the letter of intent. Not during due diligence. Now.

Before the Transaction

Pre-Transaction Trust Structures

The most powerful wealth transfer tool available to a business owner is the creation of trusts that hold equity before the value is realized. An intentionally defective grantor trust funded with business interests before a sale can remove the future appreciation—and the sale proceeds—from your taxable estate entirely. A grantor retained annuity trust can transfer value to the next generation with minimal or zero gift tax cost. But these structures must exist, and must be funded, before the transaction is certain. Once the sale is a done deal, the IRS will challenge the valuation and the transfer. We design and implement these structures during the window when they are most effective and most defensible.

Charitable Planning to Offset Capital Gains

A properly structured charitable remainder trust, funded with appreciated business interests before the sale, can defer or reduce the capital gains tax while providing you with an income stream and a charitable deduction. For business owners with philanthropic goals, this is one of the most tax-efficient strategies available—but it must be executed before the transaction closes. We design charitable planning architectures that align your philanthropic intent with your tax objectives and your overall estate plan.

Installment Sale to Grantor Trust

Selling business interests to a grantor trust in exchange for an installment note can freeze the value of the transferred assets for estate tax purposes while allowing you to retain an income stream. This technique is particularly powerful when the business is expected to appreciate significantly in connection with the transaction. The structure must be in place—and the note must be bona fide—well before the transaction to withstand scrutiny.

Entity Restructuring

The tax consequences of a sale vary dramatically depending on your entity structure. An asset sale produces different results than a stock sale. S-corporation, C-corporation, and partnership structures each carry distinct implications for capital gains recognition, ordinary income treatment, and the availability of planning techniques. We review your entity architecture before the transaction and recommend restructuring where it can produce meaningful, defensible tax savings.

After the Transaction

Estate Plan Restructuring for Sudden Liquidity

Your estate plan was designed around an illiquid business interest. Now you hold liquid wealth—and the plan must be redesigned accordingly. Trust structures, investment policies, fiduciary appointments, and distribution provisions all need to reflect the new reality. We conduct a comprehensive plan review following any major liquidity event.

Investment Entity Design

Post-exit wealth often benefits from being held in a family limited partnership, LLC, or other entity structure that provides management consolidation, liability protection, and continued transfer tax planning opportunities. We design these structures to serve your ongoing planning goals and to integrate with the trusts established before the transaction.

The Identity Transition

This is not a legal matter, but it is a real one. Many business owners who have defined themselves through their company find the post-exit period disorienting. We have observed this dynamic across decades of practice, and while we do not position ourselves as life counselors, we believe in addressing the whole person. We will be candid with you about what we have seen, and we can connect you with professionals who specialize in this transition if it would be valuable.