How to Transition After Selling Your Business

 

Many business owners don’t mind working late at night, or fielding important calls during vacation—it’s their business, after all. In a moment of total honesty, they may even tell you that they thrive on the all-consuming nature of the work.

 

If this sounds familiar to you, your post-sale life presents an entirely different type of challenge: How do you readjust your finances and goals when the thing you’ve always oriented yourself around is no longer yours? 

 

“It’s similar to retiring,” said John Gregg, 1834 Wealth Planner. “Even if you’re not actually retiring, you’re going through a major change. You want to game plan for that.”

Prepare for a New Lifestyle

To state the obvious: your sale will turn a very large, illiquid asset into liquid assets that you can deploy more nimbly. This will impact your estate planning and investment portfolio (more about that below), but it will also give you an opportunity to change your lifestyle.  

 

For example, the idea of sitting on a beach may have sounded lovely in the heat of a 100-hour work week. Now that you can take a long beach vacation, would you actually like it? Or, would you feel guilty for not being more active? Before making a major post-sale commitment, it’s worth finding out.

 

“I tell clients to consider cordoning off some of the money to spend on themselves,” said Gregg. “It could be $500,000 or $50,000, depending on the situation. What matters is that you do something you’ve always wanted to do, now that you have the time to do it. This will help you reset, and it will also help you see what you really want going forward.”

 

Gregg has seen examples ranging from couples taking a 4-month cruise around the world, to an individual seriously resuming a long-dormant archery hobby. The key is connecting to activities you really enjoy, while also giving yourself a transitionary period as you move towards your next chapter.

 

Your next step doesn’t necessarily mean ceasing work. Perhaps you’ll re-envision yourself as a business consultant, or you’ll open a neighborhood coffee shop, or you’ll become deeply involved in local politics. What you do next is up to you—you could even start a new business.

 

“There are serial entrepreneurs,” said Gregg, “It’s not uncommon for people who sell one business successfully to start the next one shortly after.”

 

In this case, a full lifestyle reset may not be in order—the next challenge is right around the corner. While many serial entrepreneurs are happy to roll all the proceeds from one sale into their next venture, some caution may make sense.

 

“I’d always think about taking some money off the table,” said Gregg.

By saving or investing a portion of the proceeds of your business sale, you may reduce your personal financial risk with your next business, while also steadily building towards your longer-term financial goals.

Update Your Estate Plan

You’ll need to review and update your Will and other relevant estate planning documents to reflect the sale of your business. Beyond that, a major question is what type of legacy you’ll leave—and how you’ll pass it on to the next generation in a tax-efficient manner. 

 

Depending on your level of wealth, you may not need to act: The One Big Beautiful Bill Act, signed in 2025, has raised the Federal estate, gift and generation-skipping transfer tax to $15 million per person, effective in 2026, with inflation adjustments going forward. If you’re part of a married couple, you could collectively pass on $30 million before being taxed.

 

However, you may still consider a trust. It allows you to remove assets from your estate and earmark them for a specific person or purpose. We cover two of the more common trusts used post-business-sale, one for passing funds to your children or grandchildren, and another for passing funds to your spouse. We also cover a charitable remainder trust below, in our section on philanthropy.

 

Irrevocable Trust. This is the most straightforward type of trust: You place funds in, designate a trustee to manage the funds, and designate a beneficiary to receive the funds at a specified time. The benefits: The funds are removed from your estate and protected from lawsuits or other legal actions. If your beneficiary is a minor (or not currently in a place to responsibly handle a large windfall), you can designate at what age they can receive funds (and how much per distribution). The downside: As the name indicates, it’s difficult to change once set up.

 

Spousal Lifetime Access Trust (SLAT). This is a type of irrevocable trust that makes sense if your business was (and the proceeds from the sale are) in your name only, but you’re married. You can remove these funds from your estate by creating a trust and naming your spouse as the beneficiary. You can also designate children and grandchildren as beneficiaries, either at the formation of the trust or as next-in-line beneficiaries at the time of your spouse’s passing.

 

Why would you do this? Your spouse gains access to the funds of the trust immediately. They can use them to maintain your joint lifestyle, meaning you effectively retain access to the funds, while removing them from your estate.

 

However, there are downsides: if your spouse passes away before you, you lose access to the funds, or you need to depend on the next-in-line beneficiary to help you maintain your lifestyle. Additionally, there’s the question of divorce.

 

“You need to have a strong marriage to open a SLAT,” said Gregg. “If you do get divorced, there’s no legal recourse to gaining access to those funds, unless the SLAT is carefully crafted.”

 

There are also a wide variety of additional trust options. If you’re considering opening one, work with your advisor, lawyer and estate planner to review your needs and find a trust that fits your situation.

Consider Charitable Opportunities

If you’re interested in building a charitable legacy, the sale of your business may present an opportunity to enhance the amount you could give while reducing your taxable income.

 

Donor Advised Funds (DAF). A DAF is a tax-advantaged brokerage account earmarked for distribution to charities. Crucially, you take the tax deduction on what you contribute, in the year you contribute. This allows you to capture a maximum deduction in the year of your business sale, while giving you time to consider where, when and how you’d like to make your charitable contributions later on. 

 

“Let’s say you sell your business for $10 million, but you funnel $2 million of that into a DAF,” said Gregg. “You’d reduce your taxable income for that year, without the pressure of having to donate immediately. You could distribute the funds over the next several years, or even the next ten or twenty.”

 

Charitable Remainder Trust. This irrevocable trust allows you to name a beneficiary (typically your spouse, or even your spouse and yourself) to receive regular payments of the course of their lifetime. Once the beneficiary passes, the amount remaining in the trust is donated to a designated charity or set of charities. The money to initially fund the trust is tax-advantaged, though the specifics vary depending on how the trust is arranged.

 

“For the charitably inclined, you’re essentially giving your loved one an annuity, while also assuring that what’s not needed is distributed philanthropically,” said Gregg.

 

In both instances, you need to plan before the business sale to take advantage of the potential tax benefits—another reason why informed and engaged advisors are so important.

Review Your Investment Portfolio

When you owned your business, a large portion of your assets were tied up in a particular industry. As a result, you likely counterbalanced your investment portfolio away from that industry, so that your overall set of assets were diversified as much as possible. This reduced your risk of being too heavily concentrated in one area of the economy.

 

Now that you have substantial sale proceeds (and no industry-specific business), your strategy may need to change. To reflect this updated asset mix, a substantial rebalancing of your portfolio may be in order.

 

You may also want to check in on your risk tolerance. If you’re on the younger side, it may not have changed. However, if you’re closer to retirement, you may consider shifting to a more conservative investment strategy, with the mindset of preserving and protecting the wealth you accumulated through your business sale, even if this means sacrificing some potential upside. Depending on your personality, that sacrifice may make sense.  

 

Each situation is unique—we recommend a forthright conversation with your wealth team as you adjust your portfolio to meet your needs.   

Your Wealth Team Is Built for This

A truly integrated team is a difference-maker when you prepare for—and execute on—major life decisions like the sale of a business.

 

At 1834, we encourage holistic thinking when it comes to wealth. For example, we often recommend gathering your lawyer, estate planner, investment strategist, wealth planner and accountant in one room in advance of major decisions like these.

 

While there’s effort in doing so, it’s often worth it: you get everyone on the same page and working collectively to develop a wealth strategy you’re confident in, from start to finish. This is invaluable—you may be surprised at the efficiencies your team finds.

 

At 1834, we believe in getting a view of the whole of our clients’ financial life; it’s at the core of what we do. If you’re curious to learn more, let’s talk.