Planning for What You Love: Protecting Your Business and Legacy

Building a business from the ground up takes years of effort, but few business owners plan

carefully for what happens after the exit. Without intentional planning, taxes and liquidity

challenges can quietly erode the wealth created over a lifetime.

This article summarizes key insights from a recent webinar hosted with Pinney Insurance, with the full video available at the end.

Understanding Tax Exposure After a Business Sale

Federal capital gains, state income taxes, and estate taxes can significantly reduce the value of a business sale—sometimes by roughly half.

It’s important to ask: If the business were sold tomorrow, what would your family actually keep?

The sale isn’t the finish line—it’s the transition from building wealth to preserving and multiplying it. Without proactive business exit planning, the tax system can shrink your legacy before your family ever sees a dollar.

Liquidity as a Strategic Tool

Liquidity isn’t just cash in the bank—it’s control, freedom, and strategy. Proper liquidity allows

business owners to:

• Replace lost income streams

• Fund estate taxes without selling assets

• Equalize inheritances

• Capitalize family investment vehicles

• Maintain stability across generations

Life insurance, when designed strategically, acts as a liquidity engine, providing tax-free cash

exactly when it’s needed. Timing is critical: pre-sale strategies can freeze values and structure trusts, while post-sale strategies optimize liquidity and reduce estate tax exposure.

Using Premium Financing to Protect Wealth

Premium financing allows business owners to fund life insurance using bank capital while

keeping personal assets invested where they perform best. This strategy provides several

benefits:

• Preserving personal capital

• Reducing opportunity costs

• Maximizing tax-efficient wealth transfer

When structured correctly, it can also reduce gift tax exposure in trust arrangements. Interest

rates, collateral requirements, and policy performance are important considerations, but these risks can be managed through careful planning.

Timing and Implementation

High-value life insurance policies require detailed underwriting, which can take 45–120 days

depending on health and responsiveness. Once underwriting is complete, coordinating with a

bank to finalize premium financing typically adds another 45–60 days.

Overall, implementation typically ranges 90–180 days. Education is essential, as many business owners and their advisors are unfamiliar with these strategies. Coordinating with CPAs, estate planners, and financial advisors ensures the plan is properly executed.

Key Takeaways For Business Exit Planning

1. Wealth can shrink by 40–60% without proactive planning.

2. Liquidity is the difference between control and chaos.

3. Advanced life insurance and premium financing strategies can reduce taxes while

maximizing value.

Next Steps

Business owners seeking clarity on liquidity, tax exposure, and estate planning can benefit from a complementary liquidity and tax efficiency analysis. This assessment provides insights into:

• Tax exposure

• Liquidity needs

• Estate planning gaps

• Leverage opportunities

No pressure, no obligation—just answers. Protect what you love, preserve your wealth, and

ensure your family receives the full value of your life’s work. Schedule your complimentary

liquidity and tax efficiency analysis today to see how these strategies can work for your family, and watch the full webinar below to explore the insights in detail.