Selling a property, company, or major asset is often one of life’s defining milestones. It reflects years of work, focus, and discipline finally materializing into liquidity. The moment the wire clears, it feels like the finish line. Yet, that’s usually when the real work begins.
The question most people face after a sale isn’t what did I make? It’s how do I make it last?
Without a plan, liquidity can slip away through large tax obligations, uneven cash flow, or rushed reinvestment decisions. Turning a sale into lasting income takes more than timing; it requires structure, foresight, and the right mix of coordinated strategies.
Why Liquidity Needs a Strategy
Large exits often come with equally large tax bills. Depending on your state and filing status, federal and state taxes can take a significant portion of the proceeds. Leaving funds idle in cash accounts means losing ground to inflation, while jumping too quickly into new investments can introduce risk. The goal isn’t just to preserve capital, but to build dependable, tax-aware income streams that align with your lifestyle and long-term priorities.
Practical Options for Executives and Business Owners
1031 Exchanges and DSTs
If the sale involves investment real estate, a 1031 exchange can defer capital gains. Combining it with a Delaware Statutory Trust (DST*) gives access to fractional ownership in institutional-grade properties that produce income without requiring direct management.
Installment Sales Trusts
Instead of paying all taxes in one year, installment sales trusts spread the recognition of gains across several years. This structure smooths income, supports cash flow planning, and can help manage exposure to higher brackets.
Qualified Retirement Plans and Roth Conversions
Entrepreneurs often overlook the power of retirement accounts during a liquidity event. Maximizing contributions in the final years before a sale, or converting traditional accounts to Roth status, can help establish future sources of tax-advantaged income.
Charitable Trusts
Executives with philanthropic goals may use Charitable Remainder Trusts to donate appreciated assets, receive immediate tax deductions, and generate income while leaving a legacy for charitable causes.
Building Income That Lasts
Thoughtful plans go beyond tax reduction. They focus on building a structure where liquidity supports:
- Reliable cash flow for daily needs
- Flexibility as goals and markets evolve
- Protection from future tax rate increases
- Smooth and efficient wealth transfer
No single tactic achieves all these outcomes. Effective plans coordinate multiple strategies, sequenced in a way that keeps capital working while protecting long-term goals.
Risks and Considerations
Each of these strategies involves complexity and risk that should be reviewed carefully with qualified professionals:
- Illiquidity: DSTs, private placements, and alternative assets generally require long holding periods and lack active secondary markets.
- Tax Law Changes: Future legislative or regulatory revisions could alter expected benefits or timing outcomes.
- Suitability: Strategies involving DSTs, alternatives, or captives are typically reserved for accredited investors and should be reviewed with qualified professionals.
- Lack of Control: Investors may have limited influence over operations, financing, or disposition decisions in certain structures.
- Market Risk: Real estate values, interest rates, and private market performance can fluctuate, affecting returns and principal value.
- Sponsor or Manager Risk: Outcomes depend on the capabilities and integrity of the entity managing the asset or program.
- Loss of Principal: All investments carry risk. There is no assurance of profit, and investors may lose some or all of their capital.
Every structure should be evaluated with a CPA, attorney, and financial advisor to confirm it aligns with your goals, liquidity needs, and tolerance for risk.
Turning an Exit into Enduring Income
Selling should represent freedom, not anxiety. With planning, liquidity can become a lasting source of income that supports your next chapter—whether that means new ventures, family, or impact.
See how successful investors structure their exits. Download our free eBook: The 1031 DST Advantage: A Tax Strategy Made Simple.
🤝 If you or someone you know needs guidance on tax-efficient investing strategies, 1031 DST Group is here to help. Schedule a free consultation or learn more at www.1031dstgroup.com/free-consultation
Disclosure:
Portions of the written content in this article were assisted by artificial intelligence (AI) technology tools and reviewed by 1031 DST Group for quality and compliance. This material is provided for educational and informational purposes only and is not intended as investment advice or a recommendation to buy or sell any security. A 1031 exchange may not be suitable for all investors and may involve risks, including the potential for loss of principal. Always consult with a qualified tax advisor or financial professional. Some investments such as Alternative investments and DSTs involve significant risks and may be illiquid, speculative, and suitable only for accredited investors*.
*Accredited investors are defined under SEC Rule 506 of Regulation D. Generally, an investor is deemed accredited if their net worth is greater than $1,000,000 exclusive of their primary residence and/or their annual income exceeds $200,000 for the current and past two years. Click here to learn more.
Ray DeWitt is a Registered Representative of Realta Equities, Inc. and an Investment Advisory Representative of Realta Investment Advisors, Inc. Investment Advisory Services are offered through Realta Investment Advisors Inc., an SEC registered investment advisor. Securities are offered through Realta Equities, Inc., Member FINRA/SIPC. Neither Realta Equities, Inc. nor Realta Investment Advisors Inc. is affiliated with C-Suite Network Or 1031 DST Group. Realta Wealth is the trade name for the Realta Wealth Companies. The Realta Wealth Companies are Realta Equities, Inc., Realta Investment Advisors, Inc., and Realta Insurance Services, which consist of several affiliated insurance agencies.
