Anatoly Iofe is founder and CEO of IceBridge Financial Group, a global multifamily office based in Boca Raton, Florida.
Imagine you’ve just sold your business for millions. Champagne’s popping, your bank account’s bursting, and you’re on top of the world. But then reality hits: Taxes gobble up a huge chunk of your windfall, and you’re scrambling to figure out how to protect what’s left for your family. Sounds stressful? It doesn’t have to be. The smartest investors avoid this chaos by planning before the sale, setting up their wealth to weather the storm. Tools like estate freezes, entity structuring and insurance wrappers are among their secret weapons.
Let’s break it down into bite-sized pieces to show you why planning now, not after the exit, is the move that can make millionaires.
Why Waiting Until After A Liquidity Event Is A Trap
Picture this: You’ve just cashed out your company for $50 million. You’re thrilled, but then the tax bill lands—millions owed in capital gains, maybe even state taxes. If you’re not prepared, in my experience, you could lose 20% to 40% of your payout right off the bat. And that’s just the start. Without a plan, you’re also facing:
Big Tax Hits: After the sale, your options to cut taxes are slim. You’re stuck reacting instead of strategizing.
Family Wealth At Risk: Waiting to plan means missing chances to pass money to your kids or grandkids without a huge estate tax bill.
Messy Decisions: The rush of a sale can make you emotional, leading to hasty choices that cost you later.
Smart investors don’t wait for the storm to hit—they build the shelter beforehand. By planning before your exit, you stay in control, save large amounts of money and set up your wealth for the long haul.
What Is Pre-Liquidity Planning, Anyway?
Pre-liquidity planning is like packing for a big trip before you leave. It’s about setting up your finances so that when you sell your business or cash out, you’re ready to keep as much money as possible and pass it on your way. Instead of scrambling after the sale, you’re calm, collected and in charge.
This planning uses clever tools to protect your wealth, cut taxes and make sure your money goes where you want it, whether that’s to your family, a charity or your dream retirement. The three big tools we’ll talk about are estate freezes, entity structuring and insurance wrappers. They sound fancy, but they’re just smart ways to help keep your money safe.
Estate Freezes—Locking In Wealth, Minimizing Taxes
Let’s say your business is worth $10 million today, but you know it’ll be worth $50 million when you sell in a few years. That extra $40 million in growth is awesome, but it could also mean a massive tax bill when you pass your wealth to your family. An estate freeze stops that problem in its tracks.
Here’s how it works: You “freeze” the value of your business at $10 million and pass the future growth ($40 million) to your kids or a trust. When you sell, that $40 million skips the estate tax, saving you millions. It’s like locking in today’s price for a stock that’s about to skyrocket—smart, right?
But here’s the catch: Estate freezes take time to set up properly. If you wait until after the sale, you miss the chance to save big.
Entity Structuring—Building A Fort For Your Money
Think of your wealth like a castle. Without the right walls, taxes and lawsuits can storm in and take a chunk. Entity structuring is about building a fortress around your money before you sell, using things like holding companies, family limited partnerships or trusts.
For example, a holding company can bundle your assets and cut taxes on profits. A family limited partnership lets you give parts of your business to your kids at a lower tax rate while you still call the shots. These setups can help save money and protect your wealth from creditors or legal trouble.
But again, setting up these structures after the sale is like trying to build a castle in a war zone—expensive and messy. Doing it now gives you time to get it right. Your castle, your rules.
Insurance Wrappers—Your Wealth’s Secret Shield
Want a way to grow your money tax-free, protect it from lawsuits and pass it to your family without taxes? Meet insurance wrappers, like private placement life insurance (PPLI). It’s like a supercharged savings account with a shield around it.
Here’s the deal: You put your investments (stocks, real estate and so on) inside a life insurance policy. The money grows tax-deferred. You can borrow from it tax-free, and when you pass away, it goes to your heirs without estate taxes. Plus, it’s protected from creditors. For business owners with big, hard-to-sell assets, this can be a game changer.
It’s like adding a secret vault to your financial fortress. But like these other tools, PPLI isn’t something you can slap together at the last minute—it needs careful planning.
Why You Need To Act Now
The clock’s ticking. Taxes can go up—capital gains rates could climb, and the estate tax exemption (currently $13.99 million per person in 2025) might drop to around $7 million in 2026.
Waiting to plan means risking a bigger tax hit and fewer ways to minimize it. Plus, planning now gives you peace of mind. You’re not just saving money—you’re taking charge of your future, making sure your wealth goes to the people and causes you care about. Whether your exit is next month or five years away, starting now puts you ahead of the game.
The Bottom Line: Plan Today, Celebrate Tomorrow
Your big exit is coming, and it’s going to be epic. But the difference between a good exit and a great one is planning before the deal closes. Estate freezes, entity structuring and insurance wrappers aren’t just tools—they’re options for potentially keeping more of your money and passing it on your terms.
Don’t wait until the sale. Start building your wealth’s future.
The information provided here is not investment, tax, legal or financial advice. Consult with a licensed legal or tax professional for advice concerning your specific situation. www.ifg.one/disclaimers
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