By Zach Whitchurch and Jeff McClean
A few years ago, a client called us the week after closing the sale of his company. The deal had gone well—better than he expected, actually. After taxes and transaction costs, he was sitting on just over $12 million in cash. And now that the deal was done, he asked the question that really mattered: “What do I do on Monday?”
That question comes up more than you would think. You spend years building something, pouring every available dollar back into the business, and then one day the wire hits your account and everything changes. The number is real, but the plan for what comes next often isn’t.
If you have recently had a major liquidity event—whether it’s a business sale, an IPO, a large equity payout, or an inheritance—the first 12 months are critical. The choices you make, or refrain from making, in this time frame can shape the next several decades of your financial life.
First, Do Nothing Dramatic
This might sound counterintuitive coming from a wealth advisor, but the best first move is usually no move at all. We have seen too many founders go from the closing table to the next deal within weeks, often because they are uncomfortable sitting with that much cash or because someone in their network has pitched them an “incredible opportunity.”
The reality is that cash isn’t going anywhere. There is no urgency to deploy it. The real urgency is building the right framework before you start putting capital to work. At Solidarity Wealth, we typically recommend a 90-day moratorium on any major financial decisions after a liquidity event. Major moves may very well make sense in time, but decisions of that magnitude deserve clarity and not the adrenaline of a recent win.
Park the Cash Thoughtfully
During that initial period, your primary job is to keep your money safe and earning a reasonable return while you plan. That means spreading funds across insured accounts, short-term treasuries, and money market vehicles. The goal during this window is preservation and access. Growth can wait.
One thing that surprises many clients: FDIC insurance only covers $250,000 per depositor, per bank. When you are sitting on $10 million or more, you need a strategy tailored to where the cash sits. We work with clients to set up structures that provide full insurance coverage across multiple institutions without the hassle of managing a dozen banking relationships.
Assemble Your Team Before You Deploy Capital
If you didn’t already have a coordinated advisory team before the liquidity event, now is the time to build one. And by team, we mean more than just a financial advisor. At this level of wealth, you need a wealth advisor who understands complex planning, an estate attorney, and a CPA who specializes in high-net-worth situations along with other advisors according to your unique situation. These professionals need to talk to each other, not work in silos.
We have seen founders lose seven figures to avoidable tax mistakes because their CPA and their attorney weren’t coordinating. We’ve seen others lock up too much capital in illiquid investments because no one was looking at the full picture. Getting the right team in place costs far less than cleaning up avoidable mistakes.
Understand What You Actually Have (After Taxes)
One of the first exercises we walk clients through is what we call the “real number” conversation. Your headline number—the sale price, the payout, the total—is not what you have. Federal and state taxes, transaction costs, deferred compensation, escrow holdbacks, and earnout provisions all take their cut. In some cases, clients are surprised to learn that their $12 million event is actually $7.5 million in usable capital after everything shakes out.
That’s not a bad outcome—$7.5 million is life-changing money. But it’s a very different planning conversation than $12 million. Getting clear on your real number early prevents you from overcommitting and helps set realistic expectations for your lifestyle, giving, and investment capacity going forward.
Resist the Illiquid Temptation
This is where we see the most expensive mistakes. Founders who spent years building an illiquid asset (their business) often feel most comfortable reinvesting in other illiquid assets—private equity deals, real estate ventures, a friend’s startup. It makes sense psychologically. Illiquidity is what they know, and the last illiquid bet paid off in a big way.
But confirmation bias is a costly advisor. Just because your business was a successful illiquid investment doesn’t mean the next one will be. We typically recommend that clients keep no more than 20–30% of their post-tax wealth in illiquid investments, at least in the first few years after a liquidity event. You need flexibility. You need options. And you need cash flow that doesn’t depend on someone else’s timeline.
Design Your Cash Flow Before Your Portfolio
Before we ever talk about investment allocation, we ask a simple question: what does your life cost? Not your old life, the one where you were reinvesting everything back into the company, but the life you want to live now.
This includes the obvious things such as housing, travel, and children’s education. But it also includes the less obvious: philanthropy, supporting family members, maintaining multiple properties, and the kind of discretionary spending that comes with this level of wealth. At Solidarity Wealth, we build what we call a “cash flow architecture”—a system that generates the income you need from dividends, distributions, interest, and other sources so you’re not constantly selling assets to fund your life.
Getting this right means you can weather market downturns without panic, fund your lifestyle without eroding your principal, and maintain the flexibility to say yes to the right opportunities when they come along.
Don’t Forget the Estate Plan
A liquidity event doesn’t just change your investment picture; it changes your estate plan entirely. If you didn’t have a meaningful estate tax exposure before, you likely do now. And while OBBBA removed the automatic sunset risk that used to drive a hard deadline, estate planning still isn’t something to put off.
Certain strategies—grantor trusts, spousal lifetime access trusts, and others—require time to set up and to be properly funded. The earlier you start this process, the more options you’ll have.
Give Yourself Permission to Enjoy It
We talk a lot about discipline and strategy, and those matter. But one of the things we have learned working with founders and executives is that the transition from building to having can be disorienting. You’ve spent years grinding, and now the game has changed.
It’s okay to buy the thing you’ve been wanting. It’s okay to take the trip. It’s okay to be generous with the people you love. The key is doing it with intention and within a framework that protects your long-term financial health. We have found that clients who build conscious spending into their plan from the beginning are far more at peace with their wealth than those who either hoard it out of fear or spend it without guardrails.
Making It Work for You
A major liquidity event is one of the most significant financial moments of your life. How you navigate the first 12 months sets the tone for everything that follows. Take your time, get the right team in place, and make deliberate decisions rooted in your values and your long-term goals.
If you’re approaching or have recently experienced a liquidity event and want help thinking through what comes next, we’d welcome the conversation. Reach out to us at info@solidaritywealth.com or call 385-374-1665 to schedule a discovery call.
Remember, you didn’t build something extraordinary by being reckless. Don’t start now.
About Jeff
For over a dozen years, Jeff McClean has advised some of the country’s most successful families on all aspects of their wealth. With his background as a former tax and estate planning attorney at a prominent Houston, Texas, law firm, Jeff has advised clients through business sales, funding rounds, IPOs, complex tax and wealth planning transactions, private and public market investments, executive compensation packages, succession planning, and much more. In short, Jeff helps clients navigate the unique challenges that come with building wealth and helps them better predict their financial future.
In addition to co-founding Solidarity Wealth, Jeff advises single-family offices on a broad array of challenges. He also serves as the Managing Partner of Solidarity Capital, an income fund managed separately by the Solidarity partners.
Jeff is a sought-after thought leader on a wide range of tax, finance, and estate planning topics. Jeff has appeared on CNBC, Bloomberg, and Fox Business, has been quoted in The Wall Street Journal, Barron’s, and Yahoo!Finance, has published in diverse publications from Silicon Slopes Magazine to the Taxation of Exempts Journal by Thomson Reuters, and spoken to endless professional groups and large company conferences.
Jeff holds a bachelor’s degree in accounting from Brigham Young University – Idaho and a Juris Doctor, with honors, from the University of Texas School of Law. Outside of work, Jeff is married and the father of three amazing children. He has also served as past president of the Salt Lake Estate Planning Council.
About Zach
Zach Whitchurch is the President and a wealth advisor at Solidarity Wealth, a privately held, independent wealth management firm that serves as a multi-family office to some of the Mountain West’s most successful families, technology entrepreneurs, and executives. Zach works with clients to develop both “Wealthy Financial Habits” and “Healthy Financial Habits” and thrives on helping them understand their finances by simplifying the complex. He uses his broad knowledge on a wide variety of topics to implement creative strategies for clients as he helps them feel both seen and heard, and supports them along the path to their dreams.
Zach has a bachelor’s degree in accounting and a master’s degree in finance from the University of Utah and holds the CERTIFIED FINANCIAL PLANNER® and Certified Private Wealth Advisor® designations. He is also a Managing Partner of Solidarity Capital. Outside of work, Zach enjoys spending time with his wife and four children and being active in both indoor and outdoor sports. He is also involved with coaching youth sports, and loves to read and learn about how the world works on a deeper level.
Solidarity Wealth is a registered investment adviser. This material is solely for informational purposes. Advisory services are only offered to clients or prospective clients where Solidarity Wealth and its representatives are properly licensed or exempt from licensure. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. No advice may be rendered by Solidarity Wealth unless a client service agreement is in place.
