Planning
An advisor who arrives after the letter of intent can help with proceeds. One who is there eighteen months earlier can change the outcome.
An advisor who meets a business owner after the letter of intent is signed can help with the proceeds. An advisor who is there eighteen months earlier can change the outcome.
Almost every meaningful decision closes before the transaction does.
The structure. How the deal is shaped drives what is taxed as what, and it is negotiated, not decreed. Owners who have never sold a business often do not know this is a live question.
Gifting before the value is established. Transferring an interest while its value is lower and less certain is a different exercise from doing it after a price is agreed. This one has a hard door and it closes early.
Charitable structures. Contributing an interest before a sale is committed can be substantially more efficient than giving proceeds afterwards, and the timing rules here are unforgiving.
Where the owner lives. State treatment varies enough to matter, and residency changes take time to establish.
A single enormous income year distorts everything: brackets, deduction phase-outs, the surtax on investment income, Medicare premiums two years later. It is also often the best charitable year the client will ever have, and the worst possible year to realize anything else.
If proceeds arrive over several years rather than at once, the planning changes considerably — and so does the risk, which is a conversation worth having honestly.
The owner has spent decades with most of their net worth in one illiquid thing and is about to hold cash. The instinct is to move quickly. The better counsel is usually that nothing needs deciding for several months, and that the identity question — who they are when they are no longer running it — matters more to the next decade than the allocation does.
You are not the tax counsel and not the deal lawyer. You are the person who convenes them early enough to matter, and who knows what the money is for.
When one holding is most of the wealth →
Questions this did not answer? Ask them directly — that is what the twenty minutes is for.
Schedule a call to see for yourself