Sandy Springs Estate Planning for Professionals With Equity Compensation or Stock Options

If you work in Sandy Springs or the greater Atlanta area and your pay package includes stock options or equity compensation, your estate plan needs more than a basic will. The same equity that builds your wealth can create serious tax problems for your family if you don’t plan around it carefully. At Slowik Estate Planning, located in Atlanta, Georgia, we work with professionals who hold incentive stock options, nonqualified stock options, restricted stock units, and other forms of equity compensation to build plans that protect what they’ve earned.

Table of Contents

• Understanding Your Equity Compensation and Why It Matters for Estate Planning
• How ISOs, NSOs, and RSUs Are Taxed, and What That Means at Death
• The Federal Estate Tax Landscape in 2026 and What It Means for Equity-Heavy Estates
• Trust Structures That Work for Professionals With Equity Compensation
• Practical Planning Steps for Sandy Springs Professionals With Equity Compensation
• FAQs About Sandy Springs Estate Planning for Professionals With Equity Compensation or Stock Options

Understanding Your Equity Compensation and Why It Matters for Estate Planning

Equity compensation is not a single thing. It’s a broad category that includes incentive stock options, nonqualified stock options, restricted stock units, employee stock purchase plans, and performance share units. Each type carries different tax rules, different timing issues, and different estate planning problems. Treating them all the same is one of the most common and costly mistakes professionals make.

Incentive stock options, or ISOs, are “statutory” stock options that meet specific requirements under IRC Section 422, while nonqualified stock options, or NSOs, are “non-statutory” options that don’t meet those same requirements. That distinction matters enormously for your tax bill. When you exercise an ISO, no regular income tax applies at the time of exercise, though the alternative minimum tax may apply. When you exercise an NSO, you trigger ordinary income tax on the spread between the exercise price and the fair market value.

When restricted stock units are granted to you, they are not taxed at that time because you don’t yet own the stock. As your RSUs vest, however, they become part of your compensation for that year and are reported on your W-2 and taxed as ordinary income, with the tax amount based on the market value of the stock on the day it vests. For a senior executive in Sandy Springs earning a large RSU grant, a single vesting event can push total income well into the highest federal bracket.

These rules interact with your estate plan in ways that aren’t obvious. Unvested options and RSUs may disappear at death or vest all at once, creating a simultaneous income tax and estate tax event for your family. Stock that has appreciated significantly since you exercised options becomes a concentrated position that carries both investment risk and capital gains exposure. Planning around these issues before they happen, not after, is the only way to protect your family’s financial future. Working with an Atlanta estate planning lawyer who understands equity compensation is the first step toward getting this right.

How ISOs, NSOs, and RSUs Are Taxed, and What That Means at Death

The tax rules for equity compensation are built around timing. Understanding when a tax event occurs, and how large it will be, is the foundation of any good estate plan for a professional with equity.

A qualifying disposition for ISOs requires holding the shares for at least two years from the grant date and at least one year from the exercise date. When you meet those holding periods, gains are taxed as long-term capital gains rather than as ordinary income. Miss either deadline and the entire spread at exercise becomes ordinary income, taxed at rates as high as 37 percent under the One Big Beautiful Bill Act, which made the 37 percent top rate permanent.

While ISOs have no regular income tax at exercise, the spread between fair market value and the strike price is an alternative minimum tax adjustment item. If your alternative minimum taxable income exceeds the exemption amount, you’ll owe AMT at 26 to 28 percent on paper gains, even if you can’t yet sell the shares. For a professional exercising a large ISO block near Perimeter Center or along the GA-400 corridor, this AMT exposure can reach six figures in a single year.

Many RSU plans say that RSUs automatically vest if you pass away. In that case, your estate receives the shares, and they are subject to both income tax and estate tax. This double tax hit can leave your family scrambling to cover a large bill with illiquid assets. Vested RSUs trigger income tax, so if you die and your RSUs vest all at once, your estate may face both income and estate taxes. Life insurance owned by an irrevocable life insurance trust or other liquid assets can provide the cash to cover taxes without forcing a sale at the wrong time.

Georgia does not impose a separate state estate tax, which is a meaningful advantage for residents compared to states like New York. However, Georgia income tax still applies to equity compensation income earned while you are a Georgia resident, making income tax planning just as important as estate tax planning for most professionals here.

The Federal Estate Tax Landscape in 2026 and What It Means for Equity-Heavy Estates

The passage of the One Big Beautiful Bill Act changed the federal estate tax picture significantly for high-earning professionals in Sandy Springs. President Trump signed the One Big Beautiful Bill Act into law on July 4, 2025, ending years of uncertainty around the fate of the increased federal gift, estate, and generation-skipping transfer tax exemptions, which were set to expire at the end of 2025.

The OBBBA permanently extends the exemption, raising it to $15 million per individual in 2026, with this provision continuing to increase for inflation adjustments going forward, beginning in 2027. For married couples, the unified estate and gift tax exemption is permanently increased to $15 million per individual, or $30 million for married couples with portability, beginning on January 1, 2026.

Does this mean you don’t need to worry about estate taxes? Not if your equity compensation is still growing. A professional in Sandy Springs holding unvested RSUs, unexercised options, and a concentrated stock position can easily see their taxable estate climb well past $15 million over the next decade. The federal estate tax rate remains at 40 percent for amounts exceeding the exemption, meaning the cost of failing to plan remains high. The annual gift tax exclusion for 2026 remains at $19,000 per recipient, which gives you one tool for moving equity-related wealth to family members each year without touching your lifetime exemption.

Working with an experienced estate tax planning lawyer is especially important when your estate includes equity that is still vesting or appreciating. The strategies that work best, including irrevocable trusts, grantor retained annuity trusts, and spousal lifetime access trusts, all depend on acting before the equity grows further in value. Waiting reduces your options and increases the taxable amount you’re trying to shelter.

Trust Structures That Work for Professionals With Equity Compensation

A revocable living trust is a solid starting point for any professional in Sandy Springs, but it does almost nothing to reduce estate or income taxes on equity compensation. The real planning happens with irrevocable structures designed specifically to hold, manage, and transfer appreciated equity.

Until RSUs vest, they generally cannot be sold, gifted, or put into a trust. That’s a critical limitation. Once shares vest and become actual stock, however, you have real options. At that point, you can transfer shares into an irrevocable trust, such as a Spousal Lifetime Access Trust or Intentionally Defective Grantor Trust, to reduce estate taxes. Both structures allow you to move appreciated stock out of your taxable estate while retaining some connection to the assets.

Under Georgia Code Title 53, Chapter 12, a trustee of an express trust has broad authority to manage, invest, and distribute trust property. Specifically, under O.C.G.A. § 53-12-261, a trustee is authorized to sell, exchange, grant options upon, and otherwise dispose of any property held in trust. This means a properly drafted irrevocable trust can hold your vested stock and manage it according to a plan you design now, even if you’re no longer around to direct it later.

A Charitable Remainder Trust under IRC § 664 is another option worth considering if you hold a large block of highly appreciated stock. You transfer the stock into the CRT, the trust sells the shares without immediate capital gains tax, and you receive an income stream for a period of years. At the end of the trust term, the remaining assets pass to a charity you designate. This can be a powerful strategy for a Sandy Springs executive who wants to diversify out of a concentrated stock position while also reducing income and estate taxes. A skilled trust attorney can help you evaluate whether a CRT or other irrevocable structure fits your specific equity compensation situation.

One caution: under IRC § 2036, if you transfer assets into a trust but retain the right to income or the power to control who benefits, the IRS will pull those assets back into your taxable estate. Proper drafting is not optional. It’s the difference between a plan that works and one that fails at the worst possible moment.

Practical Planning Steps for Sandy Springs Professionals With Equity Compensation

Equity compensation planning requires action at specific times. The window to make an 83(b) election closes 30 days after the grant date. The window to exercise ISOs without triggering ordinary income closes when holding period deadlines pass. Waiting for a convenient time often means missing the only good time.

Here are the planning steps that matter most for professionals in the Sandy Springs area. First, get a complete inventory of every equity grant you hold, including grant dates, vesting schedules, exercise prices, and current fair market values. Many professionals working near Northside Drive or the Buckhead corridor are surprised to find they hold multiple overlapping grants with different tax treatments. Companies typically structure vesting schedules to avoid triggering the $100,000 ISO annual limit, but employees with multiple overlapping grants should verify their ISO versus NSO classification each year.

Second, review your beneficiary designations. Many equity plans allow you to name a beneficiary directly. Some RSU plans let you name a beneficiary, while others automatically accelerate vesting if you die or become disabled. If your plan accelerates vesting at death, your estate needs liquidity to cover the resulting income tax bill. A durable power of attorney is also essential. If you become incapacitated before your options vest or before you can exercise them, someone needs clear legal authority to act on your behalf. Without one, a Georgia probate court may need to appoint a guardian, which takes time your options may not have.

Third, coordinate your equity plan with your broader estate documents. Your will, revocable living trust, and any irrevocable structures need to work together. Shares that vest and flow into a brokerage account outside your trust create a probate problem. Once your RSUs vest and turn into actual stock, you can make sure those shares flow into your revocable living trust, which avoids probate and ensures the stock passes according to your estate plan.

Slowik Estate Planning serves clients throughout Atlanta and the Sandy Springs area from our Atlanta, Georgia office. If your compensation package includes equity, the time to build a plan around it is now, not after the next vesting event. Contact us today to schedule a consultation and start protecting what you’ve worked hard to build.

FAQs About Sandy Springs Estate Planning for Professionals With Equity Compensation or Stock Options

What happens to my unvested stock options if I die before they vest?

The answer depends on your employer’s equity plan documents. Some plans accelerate vesting at death, meaning all unvested options vest immediately and your estate must exercise them within a set window, often 90 days or less. Other plans simply cancel unvested options at death. Either outcome can create a serious problem for your family if you haven’t planned for it. Reviewing your plan documents and building liquidity into your estate plan to cover any resulting income tax is a critical step that many professionals overlook.

Can I put my stock options or RSUs into a trust?

Generally, you cannot transfer unvested stock options or RSUs into a trust, because they are personal to you as an employee and cannot be sold, gifted, or assigned before vesting. Once options are exercised and converted to actual shares, or once RSUs vest and become shares, those shares can be transferred into a revocable or irrevocable trust. The key is having a plan in place so that vested shares flow directly into the right trust structure rather than sitting in a brokerage account outside your estate plan.

Does the new $15 million federal estate tax exemption mean I don’t need to worry about estate taxes?

Not necessarily. The One Big Beautiful Bill Act, signed on July 4, 2025, permanently raised the federal estate and gift tax exemption to $15 million per individual for 2026, with inflation adjustments going forward. However, if your equity compensation continues to vest and appreciate, your taxable estate can grow quickly. The federal estate tax rate remains at 40 percent on amounts above the exemption. Professionals with significant equity grants, concentrated stock positions, or multiple unvested awards should still plan carefully, because the value of your estate today may look very different five or ten years from now.

What is the AMT risk with incentive stock options, and how does it affect my estate plan?

When you exercise ISOs, the spread between the exercise price and the fair market value of the stock is an alternative minimum tax preference item under the Internal Revenue Code. You may owe AMT at 26 to 28 percent on that gain even if you don’t sell the shares. Under the OBBBA, the higher AMT exemption amounts established by the 2017 Tax Cuts and Jobs Act are now permanent, providing some relief. For 2026, the AMT exemption for unmarried individuals is $90,100, phasing out at $500,000 of income. Even so, a large ISO exercise can still generate a significant AMT bill. Your estate plan should account for the possibility that your estate may hold ISO shares with a large embedded AMT liability that your heirs will need to manage.

How does Georgia law affect estate planning for professionals with equity compensation?

Georgia does not impose a state-level estate tax, which is a significant benefit for Sandy Springs residents compared to many other states. Georgia income tax, however, applies to equity compensation income earned while you are a Georgia resident. This includes ordinary income from NSO exercises, RSU vesting events, and disqualifying ISO dispositions. Under O.C.G.A. Title 53, Georgia’s trust and estate laws give trustees broad authority to manage and invest trust assets, including equity compensation shares, which makes Georgia a favorable state for using trust structures to hold and manage concentrated stock positions. Working with a Georgia estate planning attorney who understands both the federal tax rules and Georgia’s specific laws is the most effective way to build a complete plan for your equity compensation.