For many owners of privately held businesses, selling the company is the single largest liquidity event of their lives. Yet what often gets overlooked is how deeply intertwined that business sale is with estate planning – and how much can be gained (or lost) depending on how the two are timed and executed.

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If you're planning for one without the other, you're likely missing half the opportunity.

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Why These Worlds Are Connected

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Business owners wear many hats – founder, CEO, employer, family steward. But when it comes to planning a sale, most think primarily about deal structure, taxes, and valuation.

Here’s the problem: estate planning is rarely looped in early enough.

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Here is why it should be:

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• Your business is likely your largest estate asset

• Gifting strategies require advance planning, often years ahead of a sale

• Discounting and valuation methods used in estate planning can significantly impact how much wealth is transferred tax-efficiently

 

Before You Sell, You Might Want to Gift

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Let’s say your company is worth $30 million today. You expect to sell it in two years for $50 million.

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If you gift an interest in the business before the sale – when the valuation is lower and marketability discounts apply – you might be able to:

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• Transfer up to $15M in value per taxpayer to heirs or trusts using your lifetime exemption

• Lock in today’s value before a liquidity event pushes it higher

• Take advantage of valuation discounts to reduce the value of the transferred interest

 

Timing matters. Once a sale is in motion, the IRS (and your advisors) may view it as a foregone conclusion – which limits the effectiveness of gifting strategies.

 

Tools That Work Well Before the Sale

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• Grantor Retained Annuity Trusts (GRATs)

• Intentionally Defective Grantor Trusts (IDGTs)

• Other Trusts (Consult with your estate planning attorney to choose the best option for your situation)

• Family Limited Partnerships (you contribute assets into one entity, then transfer minority interests from it to trusts)

• Valuation discounts (for lack of control or marketability)

 

These tools rely on expertise of experienced estate planning attorneys as well as credible, supportable valuation analysis – not post-sale pricing or guesswork.

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Coordinating the Team

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Business sale strategy and estate planning need to be coordinated among:

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• Transaction advisors / investment bankers

• CPAs

• Estate planning attorneys

• Tax attorneys

• Valuation professionals

• Trust professionals

• Wealth Advisors

 

When you assemble your team of advisors, introduce them to each other.  If these professionals operate in silos, opportunities are often missed, and errors may be overlooked.

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What Owners Should Be Asking

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• Have I reviewed my estate plan in light of a future business sale?

• Do I know what my business is worth today – not just what I hope it’ll sell for?

• Have I explored gifting, trusts, or other transfer strategies early enough?

• Am I coordinating the right professionals around both my exit and my legacy?

 

Final Thoughts

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The most effective estate plans aren’t created after the sale – they're baked into it.

A smart exit isn’t just about maximizing proceeds. It’s about protecting the legacy you've built, minimizing tax, and transferring wealth intentionally.

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If you’re thinking about selling in the next 2–5 years, now is the time to align your estate and transaction strategy – not when the LOI is on the table.

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Let’s start that conversation today.

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