If You’re a Founder, Your Estate Plan Can’t Wait

For many founders, estate planning feels like something to address “later” — after the next funding round, product launch, or market expansion. But postponing these conversations can jeopardize not only your personal wealth but also the survival of the business you’ve built.

Founders face unique challenges. Their personal net worth is often tied to the company’s valuation, their family’s financial stability depends on business continuity, and their legacy includes employees, investors, and customers, not just relatives.

Recent reports from Reuters and UBS stress that proactive estate planning for entrepreneurs is about more than tax efficiency. It’s a way to ensure your company can continue operating through leadership changes, market shifts, or unexpected events. And in 2025, evolving tax rules and planning tools have opened new opportunities for those ready to act.

Step 1: Build a Strong Foundation

Before diving into complex strategies, founders need to lock in the basics. These documents create the legal framework for everything else that follows.

• Wills and Revocable Trusts: These determine how your assets, including company shares, are distributed. For a founder, this might mean specifying who inherits equity or how voting rights are transferred.
• Powers of Attorney: Designate a trusted person to make financial or operational decisions if you become incapacitated.
• Fiduciary Appointments: Name individuals or institutions to carry out your estate plan in a way that aligns with your vision.
  
  

In my experience, these basics are often pushed aside because they don’t feel urgent. But they’re the foundation for every other move you make in estate planning. Without them, the advanced strategies simply don’t hold up. A 2024 Northern Trust study found that many entrepreneurs delay these steps, often assuming they’ll handle them once the business is more stable. But the earlier these basics are in place, the more strategic flexibility you have for advanced planning.

Step 2: Ensure Business Continuity and Liquidity

The most successful founder estate plans address the business as an operating entity, not just an asset. Without clear provisions, leadership gaps, forced sales, or liquidity crises can derail even healthy companies.

• Buy-Sell Agreements: These outline how ownership will be transferred if you die, become disabled, or leave the business. They’re particularly important in companies with multiple founders or outside investors.
• Key Person Insurance: This provides the business or surviving partners with cash to replace leadership, pay debts, or cover operating expenses during a transition.
• Liquidity Planning for Estate Taxes: Without liquidity, heirs may be forced to sell company shares or assets at unfavorable terms to cover estate taxes. Life insurance, cash reserves, or credit lines can give your successors breathing room.
  
  

UBS’s founder planning guide notes that liquidity needs should be based on a realistic valuation and anticipated tax obligations, especially if a future sale is likely. I’ve seen well-run companies undone simply because no one thought through how to fund a smooth transition. Your business deserves better.

Step 3: Use Advanced Wealth Transfer and Tax Strategies

Founders with fast-growing businesses have unique opportunities to transfer wealth efficiently while maintaining control. These tools require careful timing and execution.

• Grantor Retained Annuity Trusts (GRATs): Transfer the future appreciation of your company to heirs with minimal gift tax. If your company is poised for growth or a sale, setting up a GRAT before the value spikes can lock in significant tax savings.
• Spousal Lifetime Access Trusts (SLATs): Move assets out of your taxable estate while allowing indirect access through your spouse. This can be especially valuable if you anticipate changes to estate tax exemptions.
  Qualified Small Business Stock (QSBS): Under current federal rules, QSBS can allow up to $10–15 million in capital gains to be excluded from taxes when selling eligible shares. By gifting QSBS shares to family members, you may multiply this exemption.
• Charitable Planning: Donor-advised funds and charitable remainder trusts can reduce both capital gains and estate taxes while allowing you to support causes that align with your personal or company mission.
  
  

These aren’t off-the-shelf tools. They have to be timed and structured around your company’s growth cycle, tax position, and personal goals. That’s where the founder’s vision really shapes the plan. According to Frost Brown Todd LLP, implementing these strategies several years before a sale or exit increases their effectiveness and can multiply tax benefits.

Step 4: Make It Founder-Centric

An estate plan for a founder is not a standard set of documents—it’s a blueprint for how the business, the family, and the founder’s values will carry forward.

• Collaborate Across Disciplines: Bring your attorney, CPA, financial advisor, and business partners into the same planning sessions.
• Schedule Regular Reviews: Tax laws, business valuations, and personal circumstances change. Annual or biannual reviews keep your plan aligned with your goals.
• Document Your Values and Vision: Some founders create governance charters or “legacy letters” that outline company culture, decision-making principles, and long-term goals. Oxford Valuation Partners notes that including governance guidance in an estate plan can reduce conflict and keep the business on mission.

Conclusion

Estate planning for founders is about more than asset distribution. It’s about protecting the business you’ve built, minimizing tax exposure, and ensuring your values guide future decisions. By starting early, using the right tools, and revisiting the plan regularly, you can create a roadmap that supports your company, your family, and your legacy long after you’ve stepped away.

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At Bascom Law, we work with founders to design estate plans that reflect both their business goals and their personal priorities. Whether you’re years away from an exit or already in succession planning, we can help you take the next step with clarity and confidence.

To schedule a founder-focused estate planning consultation, visit BascomLaw.com or call 770-285-5493.

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