Selling a business is usually treated as a tax event. But the harder questions are rarely about tax. They are about whether your family could actually step in, whether the income they depend on survives the transition, and whether the plan you have still matches the life you are about to have.
I asked estate planning attorney Jake Slowik what business owners tend to miss on that front. His answer had almost nothing to do with the math and almost everything to do with the people. It is a useful counterpart to the timing and tax mechanics of pre-sale planning, and it is exactly why I believe the estate plan, the financial plan, and the tax plan have to be built in the same room rather than separate ones.
The Tax Is the Easy Part
By Jake Slowik, Founder, Slowik Estate Planning
Start with the gap between the plan you have and the plan you need
The first thing I want to understand is the gap between where their estate plan is today and where it needs to be. I ask a handful of questions. Have they done any planning at all, or is this the first detailed conversation? What does their current estate tax exposure look like, and what will it look like the day after closing? A business that's worth $15 million on paper but generates modest distributions is one problem; $15 million wired into a brokerage account is a very different one. Have they used any of their lifetime gift and estate tax exemption, and if so, how much is left?
I want to include their wealth manager and CPA in the initial meeting, because the exemption picture, basis considerations, and projected post-sale liquidity must be modeled together.
It's also important to stress-test the plan. If the owner dies before the sale closes, can the transaction still proceed, or does the deal fall apart because the wrong person now controls the entity or the shares are stuck in probate? Are there family members involved in the business or the sale, and does the plan account for them? The window before a sale is the most valuable planning window an owner will have, because the asset is still hard to value and the discount opportunities are real. Once the deal is signed, most of those doors close.
The most expensive mistake is waiting
The most expensive mistake, by a wide margin, is not calling an estate planning attorney or engaging in any tax strategy until the week of closing, or even after the term sheet is signed. By then the business has a defined price, a willing buyer, and in many cases a binding letter of intent. The IRS takes the position that if you transfer interests after a sale is effectively negotiated, you've given away cash, not a hard-to-value business, and you lose the valuation discounts and the ability to shift future appreciation out of your estate. Strategies that could have saved millions in transfer tax, such as funding a grantor trust or a GRAT well before the buyer materializes, aren't available anymore. The planning isn't worth less at the closing table; it's often worth nothing. The owners who capture significant value are the ones who start 12 to 24 months out, while the outcome is still uncertain.
Whether to move equity is not only a tax question
Owners often get conflicting advice on whether to move equity out of their hands before a sale or hold onto it. I help them think it through by walking several things at once, and only one of them is tax.
First, control: how much of the business does the owner need to retain through closing, and can we move economic value without giving up voting or decision-making authority?
Second, the tax picture: what's their projected estate tax exposure, how much exemption do they have left, and what's the basis story, because lifetime gifting and a step-up at death pull in opposite directions and you have to weigh transfer tax savings against a lost basis adjustment.
Third, distributions and cash flow: how much of the business's revenue is still needed to fund actual life, whether that's the owner's own lifestyle or support for children and grandchildren? Moving equity into trusts or other structures can disrupt or redirect the cash flow a family has come to rely on, and that has to be modeled before anyone signs anything. A strategy that's elegant on paper but cuts off the income someone lives on is not a strategy I'll recommend.
Fourth, charitable inclinations: an owner who plans to give may be far better served by gifting pre-sale appreciation to a charitable vehicle than by writing checks from after-tax proceeds.
Fifth, deal constraints: private equity buyers, co-investors, and partnership or operating agreements often restrict transfers, require consents, or impose drag-along and rights-of-first-refusal terms that limit what we can do and when.
I also factor in the owner's own comfort. Moving equity out sometimes means giving up some degree of access and control, and a plan that leaves someone insecure isn't a good plan regardless of the tax math. My job is to lay out the trade-offs, model them alongside the wealth manager, and help the owner make a decision they can live with rather than push a single strategy.
The exercise I run with every family
The most common failure point is that the owner has never answered the question of what happens to the business if they die or become incapacitated, and the estate plan has left gaps the financial plan assumes are covered. The financial plan often treats the business as a clean, sellable asset. The reality is messier: there's no buy-sell agreement, no succession plan, no one with signing authority, and no roadmap for the family.
I like to run an exercise with the spouse, the kids, or whoever would be left holding the business. I tell the owner they're not allowed to speak, that they just got struck by lightning. Then I turn to the family and ask practical questions. Do you know what you own? Do you know where the keys to the store or the factory are? Can you log into the bank account and make payroll on Friday? Do you know who to call: the attorney, the CPA, the key employee who runs day-to-day operations?
Almost every time, the room goes quiet. A beautifully drafted trust doesn't help if the family can't access the operating account or doesn't know the business has a line of credit coming due. Aligning the two plans means making sure the legal documents, the liquidity, and the institutional knowledge all connect.
What a good plan is really for
I wish more owners understood that the tax savings are the easy part, and that the lasting impact of their plan is measured in how their family functions after they're gone. Taxes are a math problem we can solve. Family dynamics are not. The plans that cause damage aren't the ones that paid a little more tax; they're the ones that left a surviving spouse unsure whether they'd be okay, or pitted children who worked in the business against children who didn't, or handed a 28-year-old a life-changing sum with no structure and no guidance.
Good estate planning is about clarity and protection. Making sure your spouse never has to wonder whether they can keep the house. Structuring inheritances so a child's share is shielded from a future divorce, a lawsuit, or their own inexperience. Deciding who steps into your role and telling your family why, so they're not litigating your intentions in your absence. Done well, a plan reduces conflict, preserves relationships, and lets your family grieve without also fighting. The clients I most admire treat their estate plan not as a tax document but as the last and clearest way they get to take care of the people they love. That's the part I wish more owners would sit with before they get to the closing table.
About the author
Jake Slowik is the founder of Slowik Estate Planning, an Atlanta-based firm serving families and business owners across Sandy Springs and the greater Atlanta area. A Harvard Law School graduate who began his career at Fried, Frank, Harris, Shriver & Jacobson in New York, he has more than a decade of experience in wills, trusts, asset protection, business succession, and probate and trust administration.
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.