Liquidity-Event Wealth: The First 90 Days Playbook

An IPO unlock, tender offer, acquisition close, or secondary sale creates a window of roughly 90 days during which the newly-liquid household should make the foundational decisions that determine tax and portfolio outcomes for the next 10-30 years. Many of these decisions are time-sensitive: entity formations that optimize the gain recognition, charitable moves that capture the deduction in the right year, hedging that protects the concentrated remainder, and investment commitments that deploy capital at scale.

The first 90 days are also cognitively difficult. The founder or senior employee is often still emotionally processing the event, dealing with press or personal attention, managing employees or former colleagues, and fielding requests from family and advisors. The decisions that compound over decades are made in this fog. Many are made poorly.

This playbook walks through the 90-day sequence that family offices use for newly-liquid clients. The specific moves vary by situation, but the structure is consistent.

Days 1-7: Stabilize and Don’t Panic-Trade

The first week should produce no irreversible decisions. The priorities are:

1. Confirm proceeds arrived. Verify the cash position. IPO unlocks and tender proceeds sometimes have payment delays or escrow holdbacks. Confirm the working number.

2. Move cash to FDIC-SIPC-insured accounts in reasonable sizes. Avoid concentration in a single account. Use Treasury bills, money-market funds at multiple institutions, or a cash management program that sweeps across multiple banks to preserve FDIC coverage.

3. Do not commit to any purchases. Houses, cars, gifts, angel investments. All can wait 60-90 days. Committing in week one produces regret in week four.

4. Inform only a small circle. Family, existing advisors, key employees if applicable. Broad announcement is not necessary and creates request flow that consumes bandwidth.

5. Engage your tax professional. The accountant you will file your return with should know the event. They will start the tax-projection work that informs the next 80 days.

Tax awareness in week one: supplemental withholding on IPO or tender proceeds is typically 22% federal under §3402(f) on the first $1M and 37% on amounts above. State withholding varies. The total withheld is often 30-35% of gross proceeds. Your actual marginal rate is typically 45-50% for large events in high-tax states. The gap is your April 15 balance due. Budget for it in week one; do not commit cash that you need for taxes.

Days 8-21: Tax Projection and Entity Review

Weeks 2-3 are for understanding the tax picture in detail.

1. Run the tax projection. Your CPA builds a projection of total federal + state tax, including NIIT, AMT, estimated tax payments due, and timing. Compare projected tax to actual withholding. Identify the gap.

2. Estate plan review. Your existing will, trusts, and beneficiary designations may be obsolete at the new wealth level. Schedule a review with your estate attorney within the first three weeks. Moves that matter: lifetime-exemption gifting (the federal exemption is $13.99M per person for 2025 but scheduled to reduce in 2026), grantor-trust strategies, GRAT structures, and funding of irrevocable trusts for children.

3. Entity structure review. Large newly-liquid households typically need to form:

   • An LLC for angel investing and private deals (liability protection and pass-through taxation).
   • A revocable trust for non-business assets (probate avoidance).
   • A charitable vehicle (DAF, private foundation, or CRT) for concentrated-stock gifts.
   • Possibly a family partnership or family LLC for gifting purposes.

4. QSBS verification. If any portion of the liquidity event involves §1202 stock, confirm the 5-year holding, original-issuance, and $50M gross-assets-at-issuance tests are met. Missing any test is catastrophic to the exclusion. Get verification in writing.

5. Review insurance. Umbrella liability should increase to $10M-$50M depending on exposure. Homeowners, auto, and specialty coverage all need refreshing.

Days 22-45: Diversification and Hedging

By week 4, you have enough tax clarity to start executing. The diversification moves:

1. Establish target concentration limits. A common post-liquidity target is 15-25% of net worth in the former employer’s stock, declining over 3-5 years to 5-10%. The specific target depends on tax cost of selling, forward belief about the stock, and risk tolerance.

2. Sell to the target. If current concentration is 60% and target is 25%, sell the excess over 12-24 months on a scheduled basis (10b5-1 plan if still insider-restricted) or in blocks if unrestricted.

3. Hedge the remainder. For positions over $2M of concentrated stock held in expectation of tax-efficient long-term appreciation, collar strategies or protective puts bound the downside.

4. Deploy into diversified portfolio. As stock is sold, deploy into a diversified benchmark. Target allocation typically 60-80% equity, 20-40% fixed income and alternatives, depending on age and risk tolerance. The specific deployment should be scheduled, not lump-sum, to avoid market-timing regret.

5. Evaluate direct indexing. For large cash deployments ($5M+), direct indexing with tax-loss harvesting produces meaningfully better after-tax returns than ETF-based indexing. Fee differential (20-40 bps) is usually outweighed by tax alpha (50-150 bps annualized).

Days 46-70: Charitable and Estate Moves

Weeks 7-10 focus on larger strategic moves.

1. Execute charitable giving strategy. If the year of liquidity is a high-AGI year, this is the year to bunch multiple years of charitable intent. Options:

   • DAF contribution of appreciated stock: up to 30% of AGI deductible immediately, five-year carryforward.
   • Private foundation contribution: 20% of AGI limit, longer administrative runway.
   • Charitable Remainder Trust (CRT): income stream for life, remainder to charity, partial deduction, current gain avoidance on contributed stock under §664.

2. Fund irrevocable trusts for next generation. The 2025 federal lifetime gift exemption of $13.99M per person is scheduled to drop to approximately $7M in 2026 unless Congress extends. High-wealth households should consider using 2025 exemption before year-end.

3. GRAT strategies for concentrated stock appreciation. A Grantor Retained Annuity Trust captures appreciation above a hurdle rate for the benefit of heirs without using gift exemption. 2-year rolling GRATs are a standard strategy for volatile concentrated positions.

4. Execute §1045 rollover if QSBS. If you have QSBS gain and want to defer into another QSBS, the 60-day rollover window is short. Start the process within 30 days of the sale if rollover is the plan.

5. File §83(b) if any restricted stock was acquired in the transaction. If the acquirer issued rollover equity with restrictions, 30-day window applies.

Days 71-90: Operational Setup

The last month sets up the operational infrastructure for long-term management.

1. Engage advisor or family office. If the wealth exceeds $15M-$30M, interview MFOs. Below, confirm or upgrade your existing advisor. Set up accounting and reporting.

2. Open and name accounts. Consolidate where possible. Set up the structure that will hold long-term investments, the structure for spending cash, and the structure for charitable assets.

3. Establish an investment policy statement (IPS). Written document describing target allocation, rebalancing rules, liquidity needs, and risk tolerance. Revisit annually.

4. Schedule annual review cadence. Annual financial review (net worth, allocation, taxes). Annual estate plan review. Annual insurance review. Quarterly investment review. Put these on the calendar now.

5. Build a team roster. CPA (generalist). Tax attorney (for major moves). Estate attorney. Investment advisor or MFO. Insurance broker. Business attorney (if applicable). This is your coordinated team. Ensure they communicate.

The 90-Day Report-Out

By day 90, you should have:

• Tax projection complete and estimated payments scheduled.
• Concentration reduction plan executing.
• Hedging in place for concentrated remainder.
• Estate plan refreshed for new wealth.
• Charitable vehicle established and initial gifts executed.
• Investment policy statement documented.
• Advisor or family-office relationship in place.
• Insurance increased to appropriate limits.
• Entity structures formed.
• §1045 rollover completed if applicable.

The 90-day package is a foundation. It does not solve every problem, but it locks in the moves that have time-based deadlines and sets up the structure for the next 5-10 years.

Common 90-Day Mistakes

1. Buying real estate in week 4. Impulse home purchases at the liquidity-event peak. Wait 6 months minimum.

2. Skipping the estate plan update. The pre-liquidity will and trusts rarely match post-liquidity reality.

3. Under-estimating the tax bill. Supplemental withholding is not your actual tax. Budget for the April 15 balance due.

4. Over-committing to charity in the excitement. Generous impulses in week 2 produce uncomfortable documentation in month 6. Set the charitable target and stage over 2-5 years.

5. Telling too many people. Discreet is correct. Public announcement produces request flow.

6. Not hedging the concentrated remainder. The position can drop 40% between day 1 and day 90 while you are still deciding how to manage it. Hedge or begin selling early.

Frequently Asked

What if my liquidity event was smaller ($3M-$10M)? The 90-day framework still applies with lighter infrastructure. Probably no family office. Simpler entity structures. Smaller charitable and trust moves. But the same time-sensitive tax deadlines.

What about the lockup period for IPO stock? Typical 180-day lockup. Some of the 90-day moves (selling) cannot execute until after lockup ends. The planning work still happens in the 90 days; execution follows.

Can I delay the estate plan update? You shouldn’t. The estate plan has immediate consequences if something happens to you. Update within 90 days of the event.

Do I need multiple attorneys? For large events, yes. Estate attorney, transaction attorney (for QSBS and related), tax attorney for unusual planning. These are different specialties.

What’s the biggest 90-day risk? Inertia. Doing nothing for 90 days because the event is overwhelming. Inertia leaves significant tax and planning value on the table.