When a business sale is approaching, owners and their families may face many financial, tax, estate, charitable, and investment decisions at once. The challenge is to identify what truly needs to happen before closing, what needs to be confirmed, what can be prepared for afterward, and what can wait.
This scenario illustrates how a coordinated planning review can help business owners organize those decisions around the transaction timeline.
The Situation
Michael and Laura, both 62, had been Beacon Pointe clients for several years when a strategic buyer agreed to acquire Michael’s company for approximately $65 million.
With a letter of intent (LOI) signed and due diligence underway, Michael was consumed by the transaction. He expected to remain with the company for 18 months after closing. Michael and Laura wanted to avoid missing a time-sensitive opportunity without rushing decisions that could safely wait.
They were considering several questions:
- What still needed to happen before closing—and what could wait?
- Which tax, estate, or charitable decisions had a true transaction or year-end deadline?
- Where should the sale proceeds go at closing, including funds reserved for taxes?
- What personal and family planning should be prepared for after the sale?
Beacon Pointe Business Owner Planning Solutions: Planning Before the LOI
Because Michael and Laura were already clients, planning began before the LOI. Working with their tax and estate professionals, the team transferred a minority business interest to an irrevocable trust for their children. The transfer was based on an independent valuation that reflected applicable pre-sale valuation discounts.
They also started a direct-indexing strategy early enough to create opportunities for tax-loss harvesting during the sale year. After evaluating charitable alternatives, they determined that a donor-advised fund better fit their goals than a charitable remainder trust.
A Review of Decisions Around Closing
After the LOI, the team conducted a Closing Decision Review to sort decisions into four groups: what required action before closing, what needed confirmation, what could be prepared for afterward, and what could deliberately wait.
The review mapped where the proceeds would go at closing, including the funds reserved for the expected tax liability. Those tax dollars would emphasize principal preservation while seeking some return until the liability was due. Investment and cash-management accounts were prepared for the remaining proceeds.
The review also clarified the timing of other decisions:
- Estate plan: It could be updated after closing if nothing was time-sensitive.
- Charitable giving: The donor-advised fund could be funded before year-end, subject to tax-professional guidance, to support a sale-year charitable deduction.
- Family planning: One month after closing, the team would help Michael and Laura prepare for conversations with their children and plan a family meeting around their goals and values.
The Outcomes
The planning process helped Michael and Laura:
- Capture pre-LOI estate-transfer opportunities while more options were available.
- Start direct indexing early enough to create potential sale-year tax-loss harvesting.
- Select and time a donor-advised fund around their sale-year charitable goals.
- Use a Closing Decision Review to separate true deadlines from decisions that could wait.
- Prepare destinations for the sale proceeds, including the expected tax reserve.
- Schedule a post-close family conversation and a values-based family meeting.
Organizing the Next Steps
A business sale can bring important decisions together on different timelines. A Closing Decision Review can help owners identify which items require action before closing, which need confirmation, which can be prepared for afterward, and which can wait—while coordinating with the appropriate tax and estate professionals.
If you could benefit from a conversation with our advisory team, we would be happy to provide a complimentary consultation.
Important Disclosure: This case study is provided for illustrative and educational purposes only. It is intended to demonstrate the types of planning strategies and advisory services that may be available through Beacon Pointe Advisors, LLC. The scenario may be based on anonymized, modified, or composite client circumstances and does not represent the experience of any specific individual or family. Any outcomes described, including tax, estate planning, or investment results, are hypothetical illustrations only and are not guarantees of future performance or results. Individual outcomes will vary based on personal circumstances, applicable laws, and market conditions. Beacon Pointe does not provide legal or tax advice.