The Overlooked Half of Exit Planning
For most business owners, selling the company is the single biggest financial event of their life. So it makes sense that the months (or years) leading up to a sale are consumed by deal structure, valuation, and tax minimization. CPAs and M&A advisors do this work well, and clients are usually well-prepared for closing day.
But here's what often gets missed: the real financial risk doesn't end at closing, it begins there.
Once the wire hits the account, an owner who has spent decades with most of their net worth tied up in an operating business suddenly has a large, liquid sum and no operating business. That transition creates problems that exit planning, on its own, doesn't solve.
Three things that go wrong without a post-sale plan:
● Concentration risk becomes cash risk. A client goes from "all my wealth is in my company" to "all my wealth is in a money market account", without a diversified investment strategy to bridge the gap.
● Tax timing decisions get made too late. Structures like installment sales, QSBS exclusions, or charitable remainder trusts often need to be in place before the LOI is signed, not after the deal closes.
● The paycheck disappears. Owners lose not just income, but the identity and routine that came with running the business. Without a sustainable income and distribution plan, that gap causes real stress, financial and otherwise.
The fix is sequencing. The best outcomes happen when the wealth advisor is brought into the conversation alongside the CPA and M&A attorney before a term sheet is signed, not after the transaction closes. That early involvement means tax strategy, investment planning, and income design are built into the deal itself, rather than reverse-engineered afterward.
For CPAs, this is often a natural extension of the relationship you already have. When a client mentions they're exploring a sale, that's the moment to loop in a wealth advisor, not after the check clears.
Important Disclosure
This material is provided for informational and educational purposes only and should not be construed as personalized investment, legal, or tax advice, or as a recommendation to buy, sell, or hold any security or to adopt any specific financial strategy. The financial impact of severance arrangements, buyout offers, and equity compensation varies based on individual circumstances. Readers should consult their financial, tax, and legal professionals before making any decisions. All investing involves risk, including the possible loss of principal. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Investing involves risks including possible loss of principal.
All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.