When business owners begin thinking about a potential sale, most of the attention naturally goes to valuation, deal terms, and taxes. But one of the most important planning questions is whether their estate plan still fits the life and business they have today, and whether key decisions need to happen before a transaction is underway.
I recently asked estate planning attorney Kent Walker to share what business owners most often miss in this stage of planning. His comments are especially relevant for owners whose estates may be large enough that estate tax exposure is part of the conversation. For others, the analysis can be different, including situations where preserving basis may matter more than shifting future appreciation out of an estate. That is exactly why estate, tax, and financial planning work best when coordinated early.
Why Estate Planning Can't Wait Until After You Sell Your Business
By Kent Walker, Founding Partner, Walker Estate Planning
For many business owners, a sale represents the culmination of decades of effort. It's understandable that attention often goes to valuation, deal terms, and potential buyers. But when an owner mentions they might sell "in the next year or two," the most important conversation actually begins with their estate plan — and how that plan will (or won't) handle the transition from illiquid business wealth to post-sale assets.
Below are five key ideas that reveal why timing is everything.
1. Where does estate planning start before a business sale?
The starting point is ownership structure and how the business is currently held — personally, through a trust, partnership, or other entity. That determines who actually benefits from the sale proceeds, how taxes will be recognized, and whether existing trusts or gifts can remove future appreciation from the owner's taxable estate.
If the owner's plan hasn't been updated since before the business grew in value, there's often a major disconnect between the original intent and the current reality. Before anything else, we need to understand who owns what and how the sale would flow through the existing plan.
2. What's the most expensive estate planning mistake before a sale?
Owners frequently wait too long to transfer ownership interests out of their estate. Once a deal is being negotiated, the business's fair market value spikes — and any last-minute transfer becomes a taxable gift at that higher value.
That missed window can translate into millions of dollars in preventable estate taxes. The ideal time to shift shares into trusts, family limited partnerships, or charitable vehicles is before letters of intent and valuations start flying around.
3. Should you do estate planning before or after selling your business?
Estate planning after the sale means the owner is working with cash that's already been taxed and is fully part of their estate. Before the sale, they can use discounts and valuation strategies — for lack of marketability or control — that dramatically reduce the taxable value of transferred interests.
In short: pre-sale planning leverages uncertainty to your advantage; post-sale planning simply allocates what's left.
That said, these strategies are most powerful when estate tax exposure is a real concern; for some owners, preserving basis may be more important than removing future appreciation from the estate.
4. Which estate planning strategies are only available before a sale?
Several key planning moves lose effectiveness — or become unavailable — when a sale is imminent:
- Grantor retained annuity trusts (GRATs) and intentionally defective grantor trusts (IDGTs) depend on transferring assets at a lower value with room to appreciate.
- Valuation discounts vanish when a pending sale price establishes clear market value.
- Charitable remainder trusts (CRTs) and donor-advised funds can still help, but they're more efficient if set up before signing a binding agreement.
- Intra-family sales or loans need to occur while fair market value remains flexible.
Once there's a definitive buyer and dollar figure, much of that strategic flexibility disappears.
5. Is estate planning only about saving on taxes?
Too often, owners view estate planning purely as a tax exercise. In reality, it's about stewardship, communication, and control. A well-crafted plan clarifies family roles, provides liquidity for heirs, and prevents conflict during wealth transitions.
It can also preserve the owner's values — through charitable legacies, education funds, or governance structures that guide younger generations.
Taxes matter, but minimizing family confusion and preserving harmony often ends up being the greater long-term return.
Bottom line: Starting estate planning early isn't just about saving on taxes; it's about ensuring that the wealth created from a lifetime of work actually achieves what the owner intends — both financially and personally. The best time to begin that conversation is long before a buyer is in sight.
About the author
Kent Walker is Founding Partner of Walker Estate Planning, an Atlanta-based wills, trusts, and estates firm with offices in Savannah and Nashville. He represents families and business owners across estate planning, probate, and business succession, including buy-sell agreements and strategies that discount and "freeze" asset values ahead of a major transaction. Before practicing law, he spent years in finance, including roles at JP Morgan and Salomon Smith Barney, and he earned his J.D. from Emory University School of Law.
Disclosure
This article is for informational purposes only and should not be construed as legal, tax, or investment advice. Planning strategies depend on each individual's facts and circumstances.