Estate planning for business owners at Apollon Wealth Management delivers three things: signed documents, beneficiary forms that match them, and a written basis record. It is built for owners who hold most of their net worth in one company. Expect the planning work to take several weeks, plus the time your estate attorney needs to draft and sign. Below the $15,000,000 federal exclusion (2026), the tax that usually matters is income tax tied to basis, not estate tax.
How much of your estate is the company?
Latoya (a hypothetical client) is 51, divorced, and runs a wholesale bakery. When a buyer sends her a letter of intent, she totals what she owns: about $3.75 million, of which the bakery is roughly 85 percent ($3.2 million of $3.75 million). Most of it can't be split, spent or easily signed over.
Owners we meet in her position usually have most of their wealth in the company, a pending sale, and a minor child or a past divorce. We work on three practical questions with them: who signs if you can't, who receives what, and what income tax travels with each asset.
Federal estate tax rarely applies under the $15,000,000 per-person exclusion for 2026. So the live questions are basis, step-up and income in respect of a decedent. Some states tax estates with much lower exemptions, so check your state's rules.
Latoya decided to start before the purchase agreement was drafted. The earnout terms decide who must be able to receive the payments.
If there's no buyer and no partner change for years
Raj and Sharon (hypothetical) asked for owner-focused estate work while Raj's partner buyout is unsettled. We suggested something smaller. Sign wills naming guardians for their three children, durable powers of attorney and updated beneficiary forms through an attorney now. Then leave the company-focused plan until the buy-sell price and ownership are fixed, since both change within two years. Doing the company piece twice would cost them attorney fees for nothing.
What does waiting until after closing cost your daughter?
For Latoya, waiting could add roughly $1.45 million of taxable income for her daughter to collect: $900,000 of earnout gain plus a $550,000 solo 401(k), against none of the bakery's gain if she died before closing. Timing decides which tax applies.
Latoya's numbers, all hypothetical, are these. She signs a letter of intent at $3.2 million, with 30 percent ($960,000) paid as an earnout over three years. Her basis is about $200,000. Her estate is far under the $15,000,000 exclusion, so estate tax isn't her problem. Income tax is.
If she died before closing, the shares would generally step up and about $3 million of gain would disappear. After closing, the unpaid earnout keeps its gain: $3,000,000 ÷ $3,200,000 = 93.75 percent of each payment, or $900,000 of the $960,000, taxed to whoever collects it. The 401(k) adds $550,000 of taxable income. Her teenage daughter receives both.
Returns on any investment are never certain, and the sale price itself could change before closing, so treat these as round illustration numbers.
What a teenager inherits if nothing is signed
What Latoya decided
If your estate is under the $15,000,000 federal exclusion (2026) and your state has no estate or inheritance tax, don't give away low-basis company shares to cut estate tax. The gift carries your basis to the recipient and saves nothing at the federal level.
| Item | Why it matters | Where to find it |
|---|---|---|
| Basis in company shares | Sets sale gain and step-up value | Old returns, K-1s, purchase records |
| 401(k) beneficiary form | Overrides the will; may name ex-spouse | Plan provider's beneficiary page |
| Earnout terms | Unpaid earnout is taxable to heirs | Letter of intent, draft purchase agreement |
| Guardian and trust for child | Minor can't inherit outright | Estate attorney's file |
| Power of attorney for shares | Someone must sign if you can't | Attorney's file, company bylaws |
| State estate or inheritance tax | Exemption may be far below federal | State revenue department |
Gift early, the articles said
Merle (hypothetical, 68) read that giving each daughter $19,000 a year in shares shrinks an estate. His shop is worth about $2.5 million and he has $900,000 in IRAs, far below the $15,000,000 exclusion. The gifts would save no federal estate tax, and the shares would keep his low carryover basis.
The same advice, followed literally by Latoya, would hurt. Giving a child shares with a $200,000 basis saves nothing, and the child later owes capital gains tax on about $3 million of gain that a step-up at death would generally have erased.
A divorce brings another trap. People update the will but not the 401(k) beneficiary form. The form generally controls, so an ex-spouse can still collect the account. Don't rely on the divorce decree; change the form with the plan provider.
Naming a minor child directly on a form can trigger a court-supervised guardianship of property, with its own costs and annual filings, and full control at 18 or 21 depending on state law.
One more: a power of attorney that never mentions business interests, or company documents that require other owners' consent to transfer shares, can stall a closing while someone petitions a court.
Which tax and Social Security choices does the estate plan touch?
Three choices move with the estate plan: Social Security claiming age, how the sale is taxed, and which documents name the trust. Gus and Deborah (hypothetical) show the first. Gus is 63 and the higher earner, so delaying his Social Security raises the survivor benefit Deborah would keep for life. The claiming age is an estate decision as much as an income one.
On taxes, the year of closing, how an earnout is reported and whether a note is held at death all decide what heirs owe. The basis record goes to the CPA before the purchase agreement.
On documents, the buyer's purchase agreement must name the trust as seller if the shares were moved into it. Beneficiary forms must point to the same trust the will does.
Apollon Wealth Management keeps one page listing each decision with its deadline: letter of intent, trust funding, beneficiary forms, closing, Social Security claim. Your estate attorney and CPA work from that same page, and we cross off one item before opening the next.
Before calling Apollon Wealth Management, check these forms yourself
Start alone. Pull up the beneficiary forms on your 401(k) and any life insurance, find the records that show your basis in the company, and write down who would sign for you. Once a letter of intent arrives or a sale is within a couple of years, bring in Apollon Wealth Management through the request form, because trust ownership and earnout terms must be settled before the purchase agreement is drafted. Clients start at $500K in investable assets, and every fee is listed in the client agreement. Estate documents are drafted and signed with an estate attorney; this work doesn't replace legal advice.
Federal estate tax rarely touches a $3.75 million estate; unpaid earnout gain and a $550,000 401(k) can.
Your questions about estate planning for business owners, answered
Can I change the trustee or my daughter's payout ages after the trust is signed?
A revocable trust can generally be amended while you're alive and competent, including the trustee and payout ages. Your estate attorney makes the change in writing, and you then check that beneficiary forms still point to the trust. An irrevocable trust is much harder to change, so ask which kind you're signing.
My solo 401(k) statement still lists my ex-husband as beneficiary; does the divorce decree override it?
Generally not. The beneficiary form on file with the plan provider controls who collects the account, even if your will and decree say otherwise. Ask the provider for its change form, name the new beneficiary or trust, and keep the confirmation. Your attorney can tell you how your state treats the decree.
What happens if my daughter turns 18 before the bakery sale closes?
She becomes an adult for most legal purposes, so assets could pass to her outright instead of through a guardian, depending on state law. That may be earlier control than you want. Ask your estate attorney whether a trust should still hold the shares and receive the earnout.
Read the rules at the source
This content is general information only and does not constitute investment, tax or legal advice tailored to your circumstances. Investing involves risk, including possible loss of principal. Past performance is no guarantee of future results. Consult a qualified professional before making any financial or legal decision.