The most prepared families, according to a New Orleans tax attorney’s book, shape an exit five to ten years before it happens. This feature lays out a plain timeline for California owners near the top 1% income line of about $987,325, with the federal figures that matter and the questions to settle at each stage.
By Dr. Tamara Patzer
Most owners meet their exit as a surprise. A buyer calls, a partner retires, a health scare arrives, and the decisions that should have taken years have to be made in weeks. Attorney Todd M. Villarrubia of New Orleans, author of Entrepreneurial B.E.A.S.T. Mode™, describes a different pattern among the families he writes about. In the book’s words, “The most astute families don’t wait for a letter of intent; they engineer the outcome they want five to ten years before an exit.” This piece turns that idea into a timeline.
Where does a California owner stand against the top 1% line?
California filers needed roughly $987,325 of adjusted gross income to land in the top 1%, by SmartAsset’s 2026 projection from 2022 IRS data1. The count is of filers, not households, and like every projection it will be replaced as newer data arrives. An owner can sit well below that line for years and cross it in the one year of a sale.
That asymmetry is why the clock matters. The planning that pays off in the sale year has to be done many years earlier.
What should happen ten to seven years out?
This is the stage for questions, not transactions. The owner decides what the exit is meant to accomplish: a full sale, a partial sale, a transfer to family or a gradual step back. They list every entity, who owns it and how each is taxed. They identify the advisers who will carry the plan, and they make sure those advisers talk to one another.
The book says plainly that the quality of the team limits the outcome: “the quality of your advisors determines the ceiling on your legacy”. Choosing the team early costs little and avoids the situation where the lawyer, the accountant and the investment adviser meet for the first time at the closing table.
What should happen six to four years out?
Structure. The owner and advisers work out how the company and its assets are held, and whether the arrangement fits the exit the owner wants. Villarrubia’s rule of thumb is that different risks belong in different entities. This is also the stage to put estate documents in place, since the book connects the plan for a sale to the plan for the estate.
The book puts the principle simply: “Wealth preservation depends not on what you own, but on how you own it.” Changes made at this stage have time to settle. Changes made in the last year can look rushed to a buyer, a lender or a tax authority.
What should happen three to two years out?
Preparation for the buyer, and for the tax year. Owners at this stage usually check the numbers that will shape the result:
- Long-term capital gains are taxed at 0, 15 or 20 percent, and an asset must be held more than one year to qualify2.
- The Net Investment Income Tax of 3.8 percent applies once modified adjusted gross income passes $200,000 for single filers or $250,000 for joint filers3.
- The IRS puts the 2026 federal estate basic exclusion at $15,000,000 per person4.
Those are federal figures with their own dates, and a licensed professional should confirm the current ones. The goal at this stage is a model: what the sale would produce, what it would cost in tax and how the proceeds would be used.
What should happen in the last year?
Execution, and the people. The owner makes sure management can run the company without them, that key employees understand what is coming and that the family knows what the plan is. The book places weight on this last point. In its words, “Money changing hands means nothing if stewardship doesn’t change with it.”
A sale that is well structured and poorly explained can still fracture a family. The year before closing is the time to make sure everyone has heard the reasons.
What happens after the sale?
The clock does not stop. Villarrubia is direct: “Exit planning doesn’t conclude with the sale.” The proceeds have to go somewhere, the owner’s role has to change and the family’s governance has to adapt to a new balance sheet. A founder who spent decades concentrating wealth in one company now faces the opposite problem: managing a portfolio.
Owners often underestimate this stage. The business no longer sets the schedule, and the old advisers may not fit the new situation.
What mistakes do owners make with the clock?
Three come up often. The first is waiting for an offer before beginning. The second is treating the sale as a tax event only, without regard to the family or the company’s future. The third is assuming that what worked for a neighbor will work for them, when the entity, the state and the family are different.
None of these is a reason for alarm. Each is a reason to start early, ask plain questions and write down the answers. A timeline that is wrong in the details but exists is more useful than a perfect plan that was never made.
How do you know the clock has started?
When you can answer the first question: what do I want the exit to accomplish? Until then, the clock is only a calendar. Write the answer in a sentence and share it with one adviser. That single step turns a vague intention into a project with a date. Revisit it each year and adjust as the company and the family change. Owners who have a written sentence often find the later decisions easier, because they have something to measure each option against. Without it, every offer looks like a good idea or a bad one depending on the mood of the day.
Common questions
Is ten years realistic for every owner? No. The point is to start as early as possible. Even a short runway helps.
What if an offer arrives tomorrow? Then the most useful step is to gather advisers quickly and ask which choices can still be made. A licensed attorney and a tax professional can say.
Does the timeline change for family transfers? Often. Transfers to family involve estate and gift rules and family decisions that a sale does not.
Sources
- SmartAsset, Income Needed to Be in the Top 1% in Every State (2026)
- Internal Revenue Service, Topic no. 409, Capital Gains and Losses
- Internal Revenue Service, Topic no. 559, Net Investment Income Tax
- Internal Revenue Service, What’s New: Estate and Gift Tax
About the author. Dr. Tamara Patzer is a publisher and former newspaper editor. She was on the staff of The Charlotte Sun when it was named a 2005 Pulitzer Prize finalist for its Hurricane Charley coverage.
About the source. Todd M. Villarrubia is an attorney with an LL.M. in Taxation and a Juris Doctorate. He is an Accredited Estate Planner, a Board Certified Expert in Estate Planning and Administration, and a Fiduciary Investment Advisor Representative. He is the author of Entrepreneurial B.E.A.S.T. Mode™. Wealth Planning Law Group, 101 W. Robert E. Lee Blvd., Ste 404, New Orleans, LA 70124. Phone: 504-982-8207; email: todd@lawealthplan.com; website: https://lawealthplan.com/?utm_source=newsanchored&utm_medium=california-gazette&utm_campaign=top-1pct
Attorney advertising. Sponsored feature written on behalf of Todd M. Villarrubia. This article is general information, not legal or tax advice, and reading it does not create an attorney-client relationship. Results vary.
