Practice Sale Planning and Trusts

If you own a professional practice in Atlanta, Georgia, you have built something valuable. Whether you run a medical office, a dental practice, a law firm, or an accounting business, that practice is likely one of your biggest assets. But here is a question worth thinking about: what happens to that value when you decide to sell, retire, or pass away? Practice sale planning with trusts is one of the most powerful ways to protect what you have worked hard to build. At Slowik Estate Planning in Atlanta, Georgia, we help practice owners plan ahead so they can keep more of what they earn and pass on a lasting legacy.

Table of Contents

• What Is Practice Sale Planning and Why Does It Matter?
• How Trusts Work in a Practice Sale Plan
• Georgia Trust Law and Practice Sale Structures
• Tax Planning Considerations for Practice Sales in Atlanta
• Asset Protection Through Trusts Before and After the Sale
• FAQs About Practice Sale Planning and Trusts in Atlanta, Georgia

What Is Practice Sale Planning and Why Does It Matter?

Practice sale planning is the process of preparing your professional practice for a future sale, transfer, or transition. It involves more than just finding a buyer. It means structuring the transaction in a way that protects your financial interests, reduces your tax burden, and fits into your overall estate plan. For many Atlanta professionals, the sale of a practice represents years of hard work. Without proper planning, a large chunk of those proceeds can go to taxes, creditors, or probate.

Think about it this way. Say you are a dentist in Atlanta who has built a practice worth $2 million. If you sell without planning, you could face capital gains taxes on the full amount, plus potential estate taxes if those proceeds are still in your name when you pass away. A well-structured plan can change that picture significantly. Trusts, in particular, give you tools to manage how the sale proceeds are received, invested, and eventually transferred to your heirs.

Georgia law, under O.C.G.A. Title 53, Chapter 12, the Revised Georgia Trust Code of 2010, gives practice owners a wide range of trust options to work with. These include irrevocable trusts, spendthrift trusts, and charitable trusts, each with its own set of benefits. When you combine these trust structures with a thoughtful practice sale strategy, you gain real control over your financial future. The team at Slowik Estate Planning, located in Atlanta, Georgia, works with practice owners to build plans that reflect their specific goals. Reach out to an Atlanta estate planning lawyer at our firm to get started.

How Trusts Work in a Practice Sale Plan

A trust is a legal arrangement where one party, called the grantor, transfers assets to a trustee who manages them for the benefit of one or more beneficiaries. In the context of a practice sale, trusts can be used before, during, or after the sale to achieve specific goals. The right trust structure depends on your timeline, your tax situation, and what you want to happen to the money after the sale.

One common approach is to transfer ownership interest in your practice to an irrevocable trust before the sale. This can remove the value of the practice from your taxable estate, which matters a great deal if you are concerned about estate taxes. However, there is an important tax consideration here. Under IRS Revenue Ruling 2023-2, if you transfer assets to an irrevocable grantor trust and those assets are not included in your gross estate at death, they do not receive a step-up in basis under Internal Revenue Code Section 1014. That means your heirs could inherit assets with a lower cost basis, which increases their capital gains exposure when they sell. This is a critical planning point that requires careful attention.

On the other hand, a revocable living trust does not remove assets from your estate, but it does allow the practice sale proceeds to pass to your beneficiaries without going through probate. Under Georgia law, Article 3 of O.C.G.A. Chapter 12 (§§ 53-12-40 through 53-12-45) governs the revocation, modification, and termination of trusts, giving grantors flexibility to adjust their plan as circumstances change. Proper trust administration after the sale is just as important as the initial planning. Our team at Slowik Estate Planning can guide you through both steps.

Georgia Trust Law and Practice Sale Structures

Georgia’s Revised Trust Code of 2010, found in O.C.G.A. Title 53, Chapter 12, is one of the most comprehensive trust frameworks in the Southeast. It gives practice owners and their attorneys a strong legal foundation to build creative and effective plans. Understanding a few key provisions can help you see why trust-based planning is so powerful in Georgia.

Article 5 of the Revised Georgia Trust Code (§§ 53-12-80 through 53-12-83) covers spendthrift and discretionary trusts. A spendthrift trust protects trust assets from the beneficiary’s creditors. If you sell your practice and place the proceeds in a properly drafted spendthrift trust, those funds may be shielded from claims by the beneficiary’s creditors under Georgia law. This is especially useful if you have children or other heirs who face financial risk.

Article 9 (§§ 53-12-170 through 53-12-175) covers charitable trusts. A Charitable Remainder Trust, or CRT, is a popular tool for practice owners who want to sell a highly appreciated asset, receive income for life, and eventually benefit a charity. With a CRT, you can contribute your practice interest to the trust before the sale. The trust then sells the practice without paying immediate capital gains tax. You receive an income stream, a partial charitable deduction, and the remainder goes to your chosen charity. This is a legitimate and widely used strategy that fits well within Georgia’s charitable trust framework.

For practice owners with more complex needs, Article 13 (§§ 53-12-240 through 53-12-292) governs trust administration and gives trustees broad powers to manage and invest trust assets. Combined with Article 16 (§§ 53-12-340 through 53-12-364), which covers trust investments, Georgia law allows trustees to invest sale proceeds across a diversified portfolio. Pairing these provisions with solid wills and trust documents ensures your full estate plan works together. Slowik Estate Planning in Atlanta, Georgia, can help you put all of these pieces in place.

Tax Planning Considerations for Practice Sales in Atlanta

Taxes are one of the biggest concerns for any practice owner planning a sale. Federal capital gains taxes, potential estate taxes, and Georgia state income taxes can all take a significant bite out of your proceeds. Good planning can reduce that burden, but you need to start early.

At the federal level, long-term capital gains rates apply to practice interests held for more than one year. For high earners, the combined effect of federal capital gains tax and the net investment income tax under Internal Revenue Code Section 1411 can push the effective rate above 23%. If the practice sale pushes your estate above the federal estate tax exemption, your heirs could face additional taxes. As of 2026, the estate and gift tax exemption landscape has shifted following the expiration of certain provisions under the Tax Cuts and Jobs Act, making it more important than ever to plan carefully. Proper Estate Tax Planning in Atlanta Georgia is a core part of what we do at Slowik Estate Planning.

One important point from IRS Revenue Ruling 2023-2 is worth repeating. When a grantor creates an irrevocable trust and funds it with assets, but retains powers that make the trust a grantor trust for income tax purposes without including the assets in the gross estate for estate tax purposes, those assets do not receive a basis adjustment at the grantor’s death under IRC Section 1014. This means that careful trust design is essential. Getting the structure wrong can cost your heirs significant money in capital gains taxes down the road.

Georgia does not have a separate state estate tax, which is a benefit for Georgia residents. However, Georgia does tax capital gains as ordinary income at the state level. Working with an attorney who understands both federal and Georgia tax rules is essential. If you have international assets or family members abroad, International Estate Planning may also be part of your picture. Our firm at Slowik Estate Planning addresses all of these considerations in one coordinated plan.

Asset Protection Through Trusts Before and After the Sale

Practice owners face unique liability risks. Malpractice claims, business debts, and personal judgments can all threaten the value you have built. Trusts are one of the most effective tools for protecting your assets before a sale, and for protecting the sale proceeds afterward. The goal is to make sure that your hard-earned money stays where you want it, whether that is with your family, your retirement, or a cause you care about.

Under O.C.G.A. § 53-12-80 through § 53-12-83, Georgia law recognizes spendthrift trusts that can protect a beneficiary’s interest from creditors. When structured properly, these trusts can shield trust assets from claims that arise after the trust is funded. This protection does not apply to fraudulent transfers, meaning you cannot move assets into a trust after a claim arises and expect protection. Planning must happen well in advance of any legal trouble.

Georgia also allows for discretionary trusts, where the trustee has authority to decide how much and when to distribute assets to beneficiaries. Because a beneficiary in a purely discretionary trust has no guaranteed right to any specific distribution, creditors generally have a harder time reaching those assets. This makes discretionary trusts a strong option for protecting practice sale proceeds for children or other beneficiaries who may face future financial or legal risk.

Combining trust planning with other asset protection strategies, such as proper business entity structures, can create multiple layers of protection. An Asset Protection Lawyer at Slowik Estate Planning in Atlanta, Georgia, can review your full situation and recommend the right combination of tools. We want to make sure that what you have built is protected, not just for today, but for generations to come. Contact us to schedule a consultation and take the first step toward a plan that truly works for you.

FAQs About Practice Sale Planning and Trusts in Atlanta, Georgia

What is the best type of trust for a practice sale in Georgia?

The best trust depends on your specific goals. A Charitable Remainder Trust works well if you want to reduce capital gains taxes and support a charity. A spendthrift trust is a strong choice if you want to protect sale proceeds for your heirs. A revocable living trust helps you avoid probate without giving up control during your lifetime. Georgia’s Revised Trust Code under O.C.G.A. Title 53, Chapter 12 supports all of these structures. Slowik Estate Planning in Atlanta, Georgia, can help you identify which option fits your situation best.

Do I get a step-up in basis when my practice assets pass through a grantor trust?

Not necessarily. Under IRS Revenue Ruling 2023-2, assets held in an irrevocable grantor trust do not automatically receive a step-up in basis at the grantor’s death if those assets are not included in the grantor’s gross estate for estate tax purposes under IRC Section 1014. This is a critical tax planning issue that can significantly affect your heirs’ capital gains exposure. Working with an estate planning attorney before you structure your trust is the best way to avoid costly mistakes.

Can a trust protect my practice sale proceeds from creditors in Georgia?

Yes, in many cases. Georgia law under O.C.G.A. §§ 53-12-80 through 53-12-83 recognizes spendthrift and discretionary trusts that can shield trust assets from a beneficiary’s creditors. However, the trust must be properly drafted and funded well before any claims arise. Transfers made to defraud creditors are not protected. An asset protection attorney at Slowik Estate Planning can review your timeline and structure a plan that provides the strongest legal protection available under Georgia law.

When should I start planning the sale of my professional practice?

The earlier, the better. Ideally, you should begin practice sale planning at least three to five years before your target sale date. This gives you time to restructure ownership, fund trusts, and take advantage of gifting strategies before the sale. Starting early also means you can take steps to protect assets from creditors well in advance, since last-minute transfers can be challenged as fraudulent. Slowik Estate Planning in Atlanta, Georgia, works with practice owners at every stage, whether you are just starting to think about an exit or you are ready to act now.

Does Georgia have a state estate tax that affects practice sale planning?

No. Georgia does not impose a separate state estate tax, which is good news for Georgia residents. However, Georgia does tax capital gains as ordinary income at the state level, and federal estate taxes can still apply if your estate exceeds the federal exemption. As of 2026, the federal estate and gift tax exemption has changed following the expiration of certain provisions, making it important to review your plan with a qualified attorney. Slowik Estate Planning in Atlanta, Georgia, stays current on both state and federal tax rules so your plan reflects the latest law.

More Resources About Trusts for Professional Practices

• Trust Planning for Physicians Dentists and Attorneys
• Restrictive Agreements and Ownership Rules