A liquidity event is a transaction that converts an illiquid holding into cash — most often the sale of a business, but also a recapitalization, an IPO, or a large property sale. The planning decisions that matter most are generally made in the months before it closes, not after.
Charitable timing, entity structure, and the treatment of specific asset classes are all considerably harder to change once a deal is signed. Families who begin planning twelve to eighteen months out have options that families planning afterward do not.
The period immediately following is its own distinct problem. A household that has spent decades with wealth tied up in one asset suddenly holds cash, usually alongside a set of new advisers, and the temptation to make several large decisions quickly is at its highest exactly when the case for making none is strongest.
This definition is provided for educational purposes. It is general information, not investment, tax, or legal advice, and it does not account for any individual circumstances.