The wire landed, and for about a week it felt like the finish line. Then the questions started coming, and they were not the questions he’d spent twenty years getting good at. He’d built a company and run it. He had never once had to turn a pile of money into a paycheck, or sit on a stake he wasn’t allowed to sell, or watch a single tax year threaten to eat a quarter of his life’s work.
The situation
The deal was put together the way private equity deals usually are. A big slug of cash at close. A real chunk of rollover equity, meaning he reinvested into the new PE-owned company and now held an illiquid minority piece of one leveraged business. And an earnout that would pay out over a few years if the targets got hit. The cash hit a brokerage account and just sat in a money market, doing nothing in particular. The sale triggered the biggest tax year of his life. And the shape of his net worth had quietly recreated the exact risk he thought he’d just sold his way out of.
What I found
A guy who felt diversified because he was finally liquid, and wasn’t really either one as much as he thought.
- Concentration, round two. The rollover stake meant a big share of his wealth still rode on one company, a more leveraged one now, that he couldn’t sell on his own schedule. He’d swapped operating risk for financial-structure risk and called it an exit.
- A lot of idle cash, with no framework for how much should stay liquid, how much should get invested, and over what time.
- Tax moves sitting on the table. A spike-income year is exactly when some of them matter most. Whether any of his stock qualified for the QSBS exclusion was worth a hard look. So was pulling future charitable giving into this year, while the deduction was worth the most.
- No income plan. Nothing answering the question that actually keeps people up at night: how much of this can I spend, every year, for the rest of my life, without going back to work?
- Brand new estate exposure. Becoming suddenly liquid made estate planning matter in a way it never had while the money was locked inside a business.
What I did
Working with his CPA and attorney, and again, I coordinate that, I don’t replace it, we treated the windfall as something to build with, not a number to stare at.
We looked hard at the tax picture while it could still be shaped. Whether he had any QSBS exclusion coming. Using a donor-advised fund to move future giving into the high-income year, where the write-off counted most. Then we sized the rollover stake on purpose, as a bet he chose to hold at a size he could afford to be wrong about, instead of an accident of how the paperwork closed. We put the idle cash to work against an actual plan. A reserve sized to his life, then a diversified core built for the decades this money now has to last.
Then the question under all the other ones. We built a spending plan that tells him, in plain numbers, what this wealth can actually support. And since he was liquid now, we got the estate and gifting conversation going while valuations and exemptions were friendly.
The discipline that built the company is the same discipline the money needs now. Selling didn’t end the job. It just changed it.
Where it stands
The lump sum is a plan that funds his life now, not a number he’s afraid to touch. The rollover equity is a chosen, sized risk instead of an accident. The tax hit got softened everywhere the law allowed. And he’s investing the proceeds with the same discipline that earned them, which is really the whole point.
If you’ve just sold, or you can see the sale coming, the best planning happens before the wire clears, while you still have every option on the table.