Trust Planning After Selling a Business

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Selling a business is one of the biggest financial events of your life. You’ve spent years building something valuable, and now you have a large sum of cash (or other assets) to manage. What happens next matters just as much as the sale itself. Without a solid plan in place, taxes, creditors, and poor wealth management can eat away at what you worked so hard to create. That’s where trust planning comes in. At Slowik Estate Planning, located in Atlanta, Georgia, we help business owners protect and grow their wealth after a sale, using trust structures that are grounded in real Georgia and federal law.

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Why Trust Planning After a Business Sale Is So Important

Think about it this way: you just traded an illiquid business interest for a large pool of liquid cash or investment assets. That shift changes everything about your financial picture. Your exposure to estate taxes, income taxes, and creditor claims all change the moment the deal closes. If you don’t plan ahead, you could face a tax bill that takes a painful bite out of your proceeds, or find that your heirs inherit far less than you intended.

Georgia does not impose its own state estate or inheritance tax, although federal estate tax may still apply. That’s good news for Georgia residents, but it doesn’t mean you can ignore the federal side. The federal estate tax is a real concern for business owners who just received a large payout. The One Big Beautiful Bill Act has made the higher exemption permanent and increased the baseline amount, though it remains to be seen how this will impact the estate tax in 2026 and beyond. Given that uncertainty, locking in your plan now is the smart move.

Trusts give you control. They let you decide how your money is managed, who receives it, and when they receive it. They can also reduce or delay tax liability, protect assets from lawsuits, and keep your financial affairs private. Probate is a public process, but trusts are not, keeping your business matters out of public scrutiny. For a business owner who just completed a major transaction, that privacy alone can be worth a great deal. Reach out to an estate planning attorney in Atlanta at Slowik Estate Planning to start building your post-sale trust plan today.

Choosing the Right Type of Trust After Your Sale

Not all trusts are the same. The type of trust you use after selling your business depends on your goals, your estate size, and how much control you want to keep over your assets. Two of the most common options are revocable trusts and irrevocable trusts, and each comes with its own trade-offs.

A revocable living trust lets you stay in control. You can change it, add to it, or cancel it at any time. A revocable living trust avoids probate, allowing your business interest or sale proceeds to pass directly to your chosen successor. You can also designate a successor trustee to manage or distribute the assets according to your wishes. The downside is that assets in a revocable trust are still part of your taxable estate. That means they’re subject to federal estate tax and are not shielded from creditors during your lifetime.

An irrevocable trust works differently. Once you fund it, you generally give up control over the assets. In exchange, those assets are typically removed from your taxable estate. Irrevocable trusts can remove assets from your taxable estate, potentially reducing estate taxes. This can be a powerful strategy for a business owner who just received a large payout and wants to reduce estate tax exposure. However, there’s an important tax trade-off to understand, which we’ll cover in the next section.

Georgia trust law is governed by O.C.G.A. Title 53, Chapter 12, the Revised Georgia Trust Code of 2010. This law covers everything from how trusts are created and modified under Articles 2 and 3, to how trustees must manage trust assets under Articles 11 and 13. Understanding these rules matters when structuring your post-sale plan. The attorneys at Slowik Estate Planning are familiar with these provisions and can help you choose the trust structure that fits your situation. Every plan is different, and the right choice depends on your specific facts.

The Step-Up in Basis Issue and What It Means for You

Here’s a tax issue that surprises many business owners who use irrevocable trusts: the loss of the step-up in basis. This is one of the most important planning considerations after a business sale, and it’s worth understanding clearly.

Under Section 1014 of the Internal Revenue Code, when you inherit property from a decedent, your tax basis in that property is generally adjusted to its fair market value on the date of death. This adjustment can significantly reduce the capital gains tax owed when the asset is later sold by the inheritor. For example, if your parent bought stock for $100,000 and it was worth $1 million when they died, your basis becomes $1 million, and you owe no capital gains on that appreciation.

However, IRS Revenue Ruling 2023-2 changed how this rule applies to irrevocable grantor trusts. In that ruling, the IRS states that, for assets that were conveyed to an irrevocable grantor trust, there is no step-up in tax basis at the grantor’s death. The ruling is rooted in the plain language of Section 1014(b), which lists the types of property that qualify for a basis adjustment. As confirmed by the IRS, assets transferred to an irrevocable trust as a completed gift do not fall within those categories, because they were not bequeathed, devised, or inherited in the traditional legal sense.

Since irrevocable grantor trusts are often designed to exclude assets from the grantor’s taxable estate, these assets do not qualify for the step-up in basis under the ruling. As a result, beneficiaries inheriting appreciated assets may face substantial capital gains taxes when selling those assets, based on the original basis rather than the fair market value at the grantor’s death. This is a real cost that must be weighed against the estate tax savings an irrevocable trust provides. With the elimination of the step-up in basis for these trusts, careful planning is required to balance the potential capital gains tax against the estate tax. Slowik Estate Planning can help you run those numbers and choose the right path for your family.

Asset Protection Strategies Through Trust Planning

After selling a business, you may have more wealth than ever before. That can also mean more exposure to lawsuits, creditor claims, and other financial risks. Trust planning is one of the most effective ways to protect your assets from those threats, and Georgia law gives you several useful tools to work with.

Under O.C.G.A. § 53-12-80 through § 53-12-83 (Article 5 of the Revised Georgia Trust Code), spendthrift and discretionary trusts offer meaningful protection for beneficiaries. A spendthrift provision prevents a beneficiary from voluntarily transferring their interest in the trust, and it also restricts creditors from reaching trust assets before they are distributed. This can be especially valuable if you’re concerned about protecting your children’s inheritance from their own creditors or future divorces.

An irrevocable trust offers significant asset protection benefits, as the assets are no longer part of your estate. This can protect your business and personal assets from creditors and legal claims. For a business owner who just received a large cash payout, this kind of protection can be critical. If you’re in a profession or industry where lawsuits are common, placing assets in a properly structured trust can keep them out of reach of future claimants.

A dynasty trust is another option worth considering. Designed to last for multiple generations, a dynasty trust can help preserve your wealth for your descendants. It can provide ongoing management and protection of assets, ensuring that your wealth remains intact and prosperous. Georgia law permits long-duration trusts, making this a viable strategy for families who want to build lasting wealth across generations. Working with an experienced asset protection lawyer at Slowik Estate Planning can help you identify which structure gives you the best combination of protection and flexibility.

Estate Tax Planning After a Business Sale in Georgia

Selling a business can push your net worth into territory where federal estate tax becomes a real concern. Even with the current exemption levels, a significant business sale can put you closer to the threshold than you might expect, especially when you factor in other assets like real estate, retirement accounts, and investment portfolios.

While Georgia does not have a state estate tax, federal changes still matter, especially for families with real estate, retirement accounts, business interests, or investment portfolios. With the federal estate tax landscape in flux in 2026, acting now rather than waiting for more certainty is often the better choice. Trusts give you the ability to transfer wealth out of your taxable estate, lock in current exemption amounts, and reduce the overall tax burden on your heirs.

One popular strategy is selling assets to an Intentionally Defective Grantor Trust (IDGT). You sell assets to an IDGT in exchange for a promissory note. For example, you sell $5 million worth of assets to an IDGT in exchange for a promissory note. The assets grow inside the trust free of estate tax, while you continue to pay income tax on the trust’s earnings. This effectively transfers wealth to your heirs without using your gift tax exemption. It’s a sophisticated strategy that requires careful drafting and execution.

Charitable trusts are another option for business owners who want to reduce estate taxes while giving back. Under O.C.G.A. § 53-12-170 through § 53-12-175 (Article 9 of the Revised Georgia Trust Code), charitable trusts are recognized under Georgia law. A Charitable Remainder Trust (CRT), for example, can provide you with income during your lifetime, reduce your estate tax exposure, and benefit a charity of your choice at death. This can be a meaningful way to align your values with your financial plan. For more information about how federal and state tax laws interact in your plan, visit our page on Estate Tax Planning in Atlanta Georgia.

If you have international assets or family members living abroad, your post-sale trust planning becomes even more layered. Different countries have different rules about trusts, and a poorly structured plan can trigger unexpected taxes or legal complications across borders. Slowik Estate Planning also assists clients with International Estate Planning to make sure your plan works in every jurisdiction that matters to you.

Working With Slowik Estate Planning After Your Business Sale

The time right after a business sale is the most important window for trust planning. You have liquidity, flexibility, and options that you may not have again. This is the moment to put a strong, coordinated plan in place, one that protects your wealth, reduces your tax burden, and ensures your family is taken care of for generations to come.

At Slowik Estate Planning, located in Atlanta, Georgia, we work with business owners who are navigating exactly this kind of transition. We take the time to understand your goals, your family, and your financial picture before recommending any strategy. We don’t believe in one-size-fits-all solutions, because your situation is unique.

As your personal circumstances change, updating your trust is essential. Regular reviews ensure that your trust aligns with your goals and current situation. That’s why we build ongoing relationships with our clients, not just one-time transactions. We’ll help you create a plan, fund it properly, and review it as your life evolves. Regular reviews and professional guidance help protect assets, minimize taxes, and provide for loved ones according to your goals.

Whether you need a revocable living trust, an irrevocable trust, a spendthrift trust, or a combination of strategies, Slowik Estate Planning can help you build the right plan. Visit Atlanta estate planning lawyer at Slowik Estate Planning to schedule your consultation today. Your business sale was just the beginning. Let’s make sure what comes next is just as successful.

FAQs About Trust Planning After Selling a Business in Atlanta, Georgia

Do I need a trust if I’ve already sold my business and have cash in the bank?

Yes, a trust is still very valuable after a business sale. Cash and investment assets in your name are part of your taxable estate and go through probate when you die. A trust keeps those assets out of probate, protects them from creditors in some cases, and lets you control exactly how and when your heirs receive the money. Without a trust, your estate plan may not work the way you intend.

Will my heirs get a step-up in basis on assets I put in an irrevocable trust?

Generally, no. IRS Revenue Ruling 2023-2 confirmed that assets held in an irrevocable grantor trust, where those assets are not included in the grantor’s taxable estate, do not receive a step-up in basis under Section 1014 of the Internal Revenue Code. This means your beneficiaries may owe capital gains tax based on your original cost basis, not the value at your death. This is an important trade-off to weigh against the estate tax benefits of an irrevocable trust, and Slowik Estate Planning can help you analyze both sides.

How does Georgia law protect assets held in a trust?

Georgia’s Revised Trust Code, found at O.C.G.A. Title 53, Chapter 12, provides a framework for spendthrift and discretionary trusts under Article 5. A spendthrift provision can prevent creditors from reaching a beneficiary’s interest in the trust before distributions are made. Irrevocable trusts can also remove assets from your own estate, shielding them from your personal creditors. The level of protection depends on how the trust is drafted and funded, which is why working with a knowledgeable attorney matters.

What is an IDGT and is it a good strategy after a business sale?

An Intentionally Defective Grantor Trust (IDGT) is an irrevocable trust that is structured so the grantor pays income tax on the trust’s earnings, while the assets inside the trust grow free of estate tax. You sell assets to the IDGT in exchange for a promissory note, which removes the assets and their future appreciation from your taxable estate. It can be a strong strategy after a business sale, especially if you have assets that are likely to grow significantly over time. However, it requires careful planning and proper execution to work correctly.

When is the best time to set up a trust after selling my business?

The best time is as soon as possible after the sale closes, ideally before the proceeds are invested or distributed. The sooner you transfer assets into a properly structured trust, the sooner those assets begin accumulating outside your taxable estate. Waiting can cost you in estate taxes and missed planning opportunities. Slowik Estate Planning encourages business owners to begin the conversation even before the sale closes, so the plan is ready to implement the moment the deal is done.

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