Business Owners
Published August 19, 2026 by Harbor Point Advisors
The wire cleared on a Thursday afternoon. By Sunday he had six people with an opinion about it.
His brother-in-law. Two advisors he had never met who somehow knew the closing date. The bank, calling to congratulate him and to mention that a private client team would love to sit down. His accountant, who was the only one on the list with actual information. And his wife, who asked him the only question that turned out to matter, which was whether he was going to be all right.
He had spent thirty-one years building the thing. Two years selling it. And roughly ninety-six hours being wealthy on paper before the first person asked him what he was going to do with the money.
That is the situation this post is about. It is a composite, not one client, and the details are changed. But the shape of it is the same every time, and the shape is what most of the advice out there gets wrong.
Because almost everything you will read about selling a business is about the deal. Multiples. Diligence. Working capital pegs. Earnouts. Then the deal closes, and the writing stops, right at the moment your entire financial life changes.
The money is the part nobody covers. So here is the ninety days, as plainly as I know how to write it.
Fewer things than you would think. Three, honestly.
The first is tax. Not the return. The reserve. Somebody has to figure out what portion of that balance is not yours and get it separated before it starts feeling like it is.
The second is custody. Where the money physically sits, in whose name, and how much of it is actually protected while it sits there. That is a mechanical question with a mechanical answer, and it is the one people skip.
The third is anything the purchase agreement already put on a clock. Escrow release dates. An earnout schedule. A seller note. A transition employment period with a start date. Those were decided at closing and they run whether you engage with them or not.
That is the list. Income planning is not on it. Legacy planning is not on it. Choosing between a hundred financial products is not on it.
The first ninety days is a custody problem, not an allocation problem. Almost every expensive mistake I have watched a seller make came from treating it as the second one.
Because a business sale usually lands in a year that looks nothing like the years on either side of it, and that one fact reorders everything.
I am a licensed insurance producer, not a CPA, so take this as the reason to make a phone call rather than as tax advice. But the general mechanics are worth knowing before you sit down with your own tax professional.
A sale can throw off more than one kind of taxable income at once. Long term capital gain on some of it. Ordinary income on depreciation recapture or on the portion allocated to things like consulting agreements and non-competes. State income tax in most places. Potentially the net investment income tax on top. The allocation of the purchase price across asset classes, which was negotiated back in the deal, is what drives a lot of that, and it is already done.
Then there is the timing piece, which catches people who have only ever had a paycheck. The IRS expects tax paid through the year, not in April. There is a safe harbor: pay in at least one hundred percent of what your prior year return showed, or one hundred ten percent of it if your prior year adjusted gross income was over $150,000, in four timely installments, and the underpayment penalty comes off the table even if the final bill is far larger. Federal estimated payment dates run April 15, June 15, September 15, and January 15. Safe harbor stops the penalty. It does not stop the bill.
The point of putting that in a blog post is not so you can do it yourself. It is so that when your CPA brings it up, you already know why it matters, and so you do not spend eleven percent of a reserve you were going to need anyway.
Here is the part that connects to everything below. The year of the sale is often a uniquely high income year, and the year after is often a uniquely low one. Which of those years a given decision lands in can change the arithmetic on it substantially. That is a conversation between you and your tax professional, and it is a good reason to slow the rest of it down until the tax picture is drawn.
Tax rules change. Everything in this section reflects current federal law as of publication and is education, not tax advice.
This is the question I get asked most and the one I am least useful for, so let me draw my edges in ink.
I work in insurance and advanced markets. I am not securities registered. I do not manage brokerage accounts, I do not place Treasury purchases, and I am not going to pretend otherwise in order to stay in the conversation. When a seller asks me where to park it for ninety days, I tell them to call their bank and their CPA, and I mean it.
What I will tell you is the thing sellers are most often surprised by, because it is not a securities question and it is not a tax question. It is just a fact about banks.
FDIC deposit insurance covers up to $250,000 per depositor, per insured bank, per ownership category. Principal plus accrued interest. That limit has been in place since 2008.
So a seven figure balance sitting in one checking account at one bank is, in the main, uninsured. Not at risk in any dramatic sense. Just uninsured, which is a different thing from safe, and most people who have never held that kind of balance assume the two words mean the same thing.
There are ordinary ways to address it. Spreading across multiple banks. Using more than one ownership category at the same institution, since single, joint, certain retirement, and trust accounts each get their own limit. Treasury instruments and money market options, which sit outside FDIC coverage entirely and have their own characteristics. Your bank and your accountant can walk the specifics. It is a one afternoon problem and it is worth the afternoon.
Note that annuities and life insurance are not FDIC insured either. They are backed by the claims paying ability of the issuing insurance company, which is a real form of backing and a different one. Anybody who blurs those two together is not being careful with you.
Nearly all of it can wait. And the waiting is not passive.
The lifetime income decision can wait. The legacy decision can wait. The protection decision can wait, with one honest exception I will name in a minute. None of those get worse because you spent a season getting your arms around the number.
There is a real cost to waiting, and I would rather say it than have you find it on your own. Cash sitting still is cash not working. Over ninety days, on most balances, that cost is small and knowable.
The cost of moving too fast is neither small nor knowable, because you cannot price optionality you already gave away.
And there is something underneath the arithmetic that I have watched enough times to trust. The person you are ninety days after closing is not the person you will be a year after closing. Right now some part of you is still running the company in your head at four in the morning. Decisions made from that chair tend to be about relief. Decisions made a year out tend to be about what you actually want.
The exception on protection is this. Life insurance requires medical underwriting, and health is the one variable that only moves one direction with age. If protecting a spouse or a next generation is part of the plan at all, that conversation is worth having earlier rather than later, because eligibility is not something you can decide to have later. That is the honest version of urgency. It does not need a deadline attached to it and I am not going to attach one.
The risk is that you sign a contract sized for a person you were sixty days after closing.
Take a fixed indexed annuity, which is squarely in the work I do. It is an insurance contract. It has a surrender period, commonly somewhere from five to ten years, with declining surrender charges and often a market value adjustment. The principal is protected from index loss, and the guarantees in it are subject to the claims paying ability of the issuing company. Most contracts allow a penalty free withdrawal each year, typically a defined percentage of the value.
None of that is a problem. It is a set of terms. It is a very reasonable set of terms for money that genuinely has a long job to do.
It becomes a problem exactly one way, which is when the money turns out to have a shorter job than you thought it did on the day you signed. The second business you did not plan on buying. The building. The child who needs help. Surrender charges are not a penalty for being wrong about the product. They are a penalty for being wrong about your own life, and ninety days after a sale is the worst window in a decade to be confident about your own life.
The other risk is quieter. In the first months after a sale you will be shown more financial products than in the previous twenty years combined, and you will be shown them by people who are pleasant and are being paid. I am one of those people. That is not a reason to distrust anyone, including me. It is a reason to notice that the volume of attention is a function of the balance, not of the fit.
This is my end of the table, so I will be specific about both the shape and the price.
Fixed indexed annuities and properly structured indexed universal life are the two contracts I work in most. They are insurance products, not investments. They do not directly participate in the stock market, and neither one should ever be presented as an investment or compared to one on a return basis.
What a fixed indexed annuity does is trade upside for a floor. Interest credited is linked to the performance of an index, subject to a cap, a participation rate, or a spread, and a floor of zero in a year the index falls. You give up the top of the market to be excused from the bottom of it. That trade is either worth it to you or it isn't, and both answers are legitimate. I have clients who love the arrangement and I have talked people out of it who would have hated it.
Indexed universal life is where I want to be most careful, because a lump sum and a life insurance policy do not fit together the way people assume.
You cannot put a business sale into a policy this month. Federal tax law limits how quickly a policy can be funded, and premiums above the seven pay limit turn it into a modified endowment contract, which changes the tax treatment of distributions and can add a penalty before age 59 and a half. So a policy funded from sale proceeds is generally designed to be paid in over a period of years, from money held somewhere else in the meantime. If anyone offers to move a seven figure balance into a policy in one payment, ask them to show you the seven pay limit on the illustration. That is the whole test.
Beyond that, life insurance carries a cost of insurance and policy charges, it requires underwriting, and it has to be monitored and kept in force. Loans and withdrawals reduce cash value and the death benefit. A policy that lapses or is surrendered with an outstanding loan can create a taxable event, which is the failure mode nobody puts in the brochure.
When a policy is structured correctly, kept in force, and stays inside current tax law, the death benefit is generally received by beneficiaries income tax free, and distributions taken as loans and withdrawals can generally be received without current income tax. Those are meaningful features. They are also conditional features, and the conditions are the part I would rather you hear from me than discover later.
Neither one of these is right for everybody. Some sellers should hold cash and Treasuries and never call me again. Some should do part of it and leave the rest alone. That is fine, and it is not a failure of the conversation.
Five things. If you can answer these, the product conversation gets short and honest. If you cannot, no product recommendation you receive is worth much, including mine.
What does this money have to do? Replace an income, protect a spouse, pass something on, stay available for the next thing. Most sellers need it to do several of those at once, in different proportions, which is why the answer is almost never one product.
How much of it do you need to be able to touch inside twelve months, and inside five years? Answer honestly rather than optimistically. Then add to it.
What is the tax character of each dollar? Money you have already paid tax on, money you have not, and money that gets taxed every year whether you touch it or not are three different animals. Which bucket a dollar sits in decides what you can do with it and what it costs you to.
What happens to this if you die first? What happens if your spouse does? Run both. That question is the entire reason the first two posts in this series exist.
And what are you giving up by choosing this? If nobody can name the trade-off, they either do not know the product or they are not going to tell you. Every one of these contracts has one. Caps. Surrender schedules. Underwriting. Cost of insurance. Liquidity. The trade-off is not the fine print, it is the design.
If your answer to why this product is that the illustration looked good, that is not an answer yet. It is a starting point.
How long should I wait to invest after selling my business? There is no rule. What there is, is a sequence. Reserve the tax, secure the cash, satisfy anything the purchase agreement already put on a clock, and then take the time to define what the money has to do. For most sellers that sequence takes longer than ninety days, and nothing is lost by letting it.
Where should I put the money from selling my business right now? Somewhere liquid and appropriately protected while you decide. Deposit accounts are insured only up to $250,000 per depositor, per bank, per ownership category, so large balances usually need to be spread or restructured. Your bank and your CPA are the right first calls. Insurance products, including annuities, are not FDIC insured and are backed by the claims paying ability of the issuing insurer.
How much tax will I owe after selling my business? It depends on entity type, how the purchase price was allocated, your basis, your state, and your other income for the year. Your CPA can give you a real number, usually quickly. Ask specifically about estimated payments and the safe harbor rules, because the penalty for missing them is separate from the tax itself and is avoidable.
Should I put business sale proceeds into an annuity? Sometimes, for part of it, when the money has a long job and you want a floor under it. A fixed indexed annuity trades market upside for principal protection from index loss, and its guarantees depend on the claims paying ability of the issuing insurance company. It also carries a surrender period. It is a poor fit for money you may need soon, and that is worth deciding before you sign rather than after.
Can I put a lump sum into an indexed universal life policy? Not all at once. Tax law limits how fast a policy can be funded, and exceeding the seven pay limit makes it a modified endowment contract and changes how distributions are taxed. Policies funded from sale proceeds are typically designed to be paid in over several years, with the balance held elsewhere in the meantime.
Do I need a financial advisor after selling my business? You need a CPA, and probably an attorney, before you need anyone else. Beyond that it depends on what the money has to do. Ask anyone you talk to what they are licensed to do and how they are paid, and expect a straight answer. I am a licensed insurance producer. I am not securities registered, and I say so on every first call.
If you have sold, or you are under LOI and can already see the wire, I am happy to spend twenty minutes on the phone talking through the sequence. Not the products. The sequence. If it turns out the safe money side of this is not a fit for you, that is a completely legitimate answer and you will hear me say so.
No pressure, no obligation, just clarity.
And when you do reach the point of deciding what the money should produce, the arithmetic is worth seeing side by side: how much monthly income a lump sum actually generates, three different ways.
One piece of the transaction that routinely gets treated as an afterthought is your own retirement plan. It is worth knowing what happens to your 401(k) when you sell your business before you sign the election form, not after.
Adam Stevens Harbor Point Advisors
Harbor Point Advisors is an independent insurance agency. Adam Stevens is a licensed insurance producer and is not a registered investment adviser, a securities registered representative, an attorney, or a CPA. This article is educational and is not investment, tax, or legal advice. The individual described is a composite illustration and is not an actual client. Fixed indexed annuities and indexed universal life are insurance contracts, not investments, and do not directly participate in any stock or equity investment. Guarantees are subject to the claims paying ability of the issuing insurance company and are not FDIC insured. Annuities may be subject to surrender charges and market value adjustments; withdrawals may be taxable and, if taken before age 59 and a half, may be subject to an additional 10 percent federal tax. Life insurance policies require underwriting and medical qualification, carry a cost of insurance and other charges, and must be properly structured and maintained; policy loans and withdrawals reduce cash value and death benefit, and a lapse or surrender may create a taxable event. Tax treatment reflects current federal law, which is subject to change. Please consult your own tax and legal professionals regarding your situation. Product availability varies by state.
Harbor Point Advisors. Bozeman, Montana. (406) 539-3423. Serving clients nationwide.
Harbor Point Advisors is an insurance agency. Adam Stevens is a licensed insurance professional, license number 3004330767, NPN 22297129. Not a registered investment adviser or broker-dealer.
This article is educational and is not individualized investment, tax, or legal advice.