Tax-Efficient Wealth Transfer After a Business Sale
Tax-Efficient Wealth Transfer After a Business Sale
You Sold Your Business for $20M—Now What?
Selling a business is a milestone, but what comes next is just as important: How do you structure your wealth to minimize taxes, protect assets, and create a lasting legacy?
With the federal estate tax exemption at $13.99M per person in 2025 (set to be cut in half in 2026), proactive planning is essential. Without a strategy, a significant portion of your hard-earned wealth could be lost to estate taxes, capital gains, and inefficient portfolio management.
At Asempa Wealth Advisors, we specialize in helping business owners navigate the post-sale wealth transition, ensuring your legacy is structured in the most tax-efficient way possible.
1️⃣ Use the Lifetime Estate Tax Exemption Before It Shrinks
- If you have $20M+ in assets, your estate may face a 40% federal estate tax on amounts above the exemption.
- The current exemption is expected to drop to around $7M per person in 2026, increasing tax exposure.
- Gifting assets now locks in today’s exemption and removes future growth from your taxable estate.
✔ Action: Consider gifting assets to trusts for your heirs before 2026 to utilize the higher exemption.
2️⃣ Tax-Efficient Gifting & Trust Strategies
- Spousal Lifetime Access Trusts (SLATs): Transfers assets to your spouse while keeping them outside your taxable estate.
- Intentionally Defective Grantor Trusts (IDGTs): Allows assets to grow tax-free for heirs while keeping income tax obligations with you.
- Annual Gifting Strategy: You can gift $18,000 per person per year tax-free. For a family of five, that’s $90,000 per year removed from your estate.
✔ Action: Move appreciating assets to trusts to avoid future estate tax liabilities.
3️⃣ Maximize Investment Tax Alpha with Direct Indexing & Automated Rebalancing
A liquidity event doesn’t just create a taxable event—it also provides an opportunity to optimize long-term investment tax efficiency.
- Direct Indexing: Allows for customized tax-loss harvesting, offsetting capital gains and improving after-tax returns.
- Automated Rebalancing: Ensures ongoing portfolio adjustments while maintaining tax efficiency.
- Tax-Efficient Asset Location: Placing high-growth investments in tax-advantaged accounts maximizes after-tax wealth.
✔ Action: Work with your financial advisor to implement a an efficient strategy and structured rebalancing to reduce tax drag on your portfolio.
4️⃣ State Tax Planning: Should You Change Domicile?
- Florida, Texas, and Nevada have no state income or estate tax, making them attractive for business owners post-sale.
- If you’re moving, ensure your domicile change is legally recognized to avoid challenges from high-tax states.
✔ Action: Consider a state residency analysis to explore long-term tax savings.
5️⃣ Strategic Charitable Giving to Offset Taxes
- Donor-Advised Funds (DAFs): A one-time donation to a Fidelity Charitable DAF allows for an immediate tax deduction while giving you control over future charitable distributions.
- Charitable Remainder Trusts (CRTs): Converts assets into an income stream while benefiting charities and reducing taxes.
✔ Action: Use charitable strategies to offset capital gains and estate taxes while supporting causes you care about.
Final Thought: Your Wealth Should Work for Your Family—Not Just the IRS
A business sale is only the beginning of the next financial chapter. The right combination of estate planning, investment tax efficiency, and strategic gifting ensures your wealth is structured to benefit your family, not just the IRS.
At Asempa Wealth Advisors, we help business owners build tax-efficient portfolios, protect assets, and optimize estate planning strategies post-sale.
🔹 Are you taking full advantage of today’s tax opportunities before the rules change?
#BusinessSale #EstatePlanning #WealthManagement #TaxPlanning
Important Disclaimer:
Investment returns are not guaranteed, and all investing involves risk, including the potential loss of principal. The strategies mentioned may not be suitable for everyone. It's essential to consult with a qualified estate planning attorney, CPA, and financial advisor to tailor a plan that fits your specific circumstances and to understand the legal and tax implications involved.