Business Exits & Transitions
The year before you sell is the one that decides what you keep
MTP Private Wealth at Farther works with owners twelve to twenty-four months out from a transaction, when the planning that matters most is still available.
In short
The planning that most affects what an owner keeps from a sale has to happen before the letter of intent is signed. Entity structure, how the stock qualifies, gifting, and trust work all depend on decisions made months or years earlier. Once a buyer is at the table, most of those options have closed.
The sequence
What we work through, and in what order
Not all of it applies to every business. The order matters more than the list.
01
Your number, after tax
Before any structuring question: what does the sale need to clear, net of tax, to fund the life you want next. Owners get this wrong in both directions, and it changes how you answer an offer.
02
Entity and stock structure
How the company is organized decides how the sale is taxed and whether certain exclusions apply at all. The tests look backward at conditions when the stock was issued, so this review belongs at the front.
03
Gifting and trust work
A transfer is valued when you make it. Moving a minority stake before the company is shopped is a different exercise than moving it after a buyer has named a price.
04
The company's own plan
Diligence will look at your 401(k), and unresolved compliance problems turn into purchase-price adjustments. These are also your peak income years, which is when a plan that permits larger contributions earns its keep.
05
Who coordinates
A banker, a transaction attorney, a CPA, an estate attorney, and whoever manages the proceeds. Each optimizes their piece. Somebody has to hold the whole picture, and it should not be you in the middle of a deal.
06
The first eighteen months after
Where the money sits while you decide, what the family does differently, and what replaces the income. Easier to settle before the wire arrives than during it.
Why owners wait
The call usually comes too late, and for understandable reasons
An owner running a company does not have a spare quarter to spend on hypotheticals. The banker is not engaged yet, the offer is not real yet, and every advisor conversation costs money against a deal that may never happen.
So the modelling gets postponed until there is a live buyer, at which point the calendar belongs to diligence. The owners who keep the most are the ones who treated the planning as worth doing whether or not they sold.
If you are two years out and unsure whether it is worth a conversation yet, it is. That call is short and tells you which options are still open to you.
After the wire clears
What changes the day the money lands
- Concentration risk disappears and sequence risk takes its place.
- An asset you controlled becomes a portfolio you have to allocate.
- Estimated taxes change shape, often dramatically, in the year of the sale.
- Charitable giving gets more efficient in a high-income year, if it is set up in time.
- Many owners lose their income, their role, and their routine in the same week.
Every one of these is easier to plan for in advance. We build the post-sale plan alongside the pre-sale plan, because the first eighteen months afterward set the pattern for the next twenty years.
Common questions
What owners ask us first
Twelve to twenty-four months before you expect to transact gives you access to most strategies. Some structural questions, particularly how your stock qualifies for favorable treatment, turn on conditions from years earlier, so an early review tells you which options remain open.
That depends on your entity type, your basis, how the deal is structured between stock and assets, your state, and whether any exclusion applies to your shares. The range between a well-planned and an unplanned sale of the same business is wide, which is the reason to model it early rather than at closing.
Gifting and trust transfers get harder because the valuation argument weakens once a buyer has named a price. Some entity conversions stop being useful. Retirement plan changes that would have sheltered your highest-income years may no longer apply in time.
No. They stay central, and we work alongside them. What usually goes unowned is the coordination between the tax plan, the estate plan, and what your family actually wants the money to do. That is the seat we fill.
Most of this work holds its value either way. Cleaning up entity structure, fixing the retirement plan, getting the estate documents current, and knowing your number are all worth having whether or not this particular buyer closes.
Next step
Two years out is the right time to call
Half an hour on the phone will tell you which planning is still available to you and which has already closed. There is no cost and no obligation to continue.