--- title: "Concentrated Stock, RSUs, and Deferred Comp: Estate Planning for Executives | Legacy Counsel" description: "Equity compensation creates estate planning problems that cash does not: vesting schedules, trading windows, deferred comp elections, and a balance sheet dominated by one ticker." lang: en json-ld: | [ { "@context": "https://schema.org", "@graph": [ { "@type": "LegalService", "@id": "https://jacobslegacycounsel.com/#legalservice", "name": "Jacobs Legacy Counsel", "alternateName": [ "Legacy Counsel by Jacobs Counsel", "Jacobs Legacy" ], "url": "https://jacobslegacycounsel.com", "description": "Fixed-fee estate planning for high-net-worth families, founders, executives, and professional athletes. 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Deferred comp and unvested equity generally cannot be gifted, so planning happens around them — gifting vested shares or appreciating positions into a GRAT or SLAT, coordinating 10b5-1 plans with liquidity needs, and making sure the estate has cash to pay tax without a forced sale in a blackout window.", "datePublished": "2026-03-19", "dateModified": "2026-08-12T15:51:22.754907+00:00", "author": { "@type": "Person", "@id": "https://jacobscounsellaw.com/about/drew-jacobs#person", "name": "Andrew R. 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Vested shares can generally be gifted, subject to company policy, insider trading rules, and any lock-up." } }, { "@type": "Question", "name": "What happens to deferred compensation at death?", "acceptedAnswer": { "@type": "Answer", "text": "It is generally included in the taxable estate and remains subject to income tax when paid to beneficiaries. There is no basis step-up, so the same dollars can face both income and estate tax." } }, { "@type": "Question", "name": "Is a GRAT useful for concentrated stock?", "acceptedAnswer": { "@type": "Answer", "text": "It can be well suited to a volatile, appreciating position: if the stock outperforms the required return, the excess passes to the next generation with little or no gift tax cost, and a failed GRAT largely just returns the assets." } }, { "@type": "Question", "name": "How do executives avoid a forced sale to pay estate tax?", "acceptedAnswer": { "@type": "Answer", "text": "Liquidity planning: life insurance held in an ILIT, staged diversification through a written trading plan, and where eligible, deferral elections for closely held business interests." } }, { "@type": "Question", "name": "Do trading windows and 10b5-1 plans affect estate planning?", "acceptedAnswer": { "@type": "Answer", "text": "Yes. Transfers, gifts, and trust funding all need to respect company policy and securities rules, so the timing of planning transactions should be coordinated with counsel and the general counsel's office." } } ] } ] ] --- A Practice of [Jacobs Counsel LLC](https://jacobscounsellaw.com) Serving NY · NJ · OH — Vol. 2026 [Legacy Counsel ](/) Firm Resources Estate Planning Trusts [Probate & Admin](/probate-trust-administration)[Pricing](/pricing)[Book Call](https://cal.com/drewjacobs/estate-planning)[Start Intake](/get-started) Menu 1. [Home](/) 2. [Journal](/blog) 3. Estate Planning Concentrated Stock Rsus Execu… [← Legacy Journal](/blog)Estate Planning · Executives # Concentrated Stock, RSUs, and Deferred Comp: Estate Planning for Executives Equity compensation creates estate planning problems that cash does not: vesting schedules, trading windows, deferred comp elections, and a balance sheet dominated by one ticker. March 19, 2026 9 min read By Drew Jacobs, Esq. The short answer Executives with concentrated stock, RSUs, and deferred compensation face three problems at once: illiquidity, single-stock risk, and income tax that lands on the estate rather than being forgiven at death. Deferred comp and unvested equity generally cannot be gifted, so planning happens around them — gifting vested shares or appreciating positions into a GRAT or SLAT, coordinating 10b5-1 plans with liquidity needs, and making sure the estate has cash to pay tax without a forced sale in a blackout window. Executive wealth tends to be concentrated, illiquid at the wrong moments, and governed by documents the executive did not draft. An estate plan that ignores the equity plan, the deferred compensation election, and the insider trading policy is not a plan — it is a set of forms. ## Start with what you actually own Equity compensation is not one asset class. Restricted stock units are a contractual right to future shares. Options are a right to buy. Performance shares depend on metrics that may or may not be met. Deferred compensation is an unsecured promise from your employer, payable on a schedule you elected years ago and usually cannot change. Each behaves differently at death or incapacity, and each is governed by its own plan document. The first exercise is a written inventory: instrument, grant date, vesting schedule, expiration, and what the plan says happens on death, disability, or termination. ## Know what the plan documents already decide for you Equity plans frequently override intent. Unvested awards may be forfeited. Options may have a short post-death exercise window measured in months, and if nobody exercises in time, value simply disappears. Deferred compensation may pay out as a lump sum on death, landing in a single tax year regardless of what would have been efficient. Read those provisions before drafting. A well-designed plan tells your fiduciary exactly which deadlines exist and who is responsible for meeting them. ## Concentration is a planning problem, not just an investment one When most of the balance sheet is one company's stock, the estate inherits both the upside and the sequencing risk. Trading windows, 10b5-1 arrangements, and insider status limit when shares can be sold — including for an executor who needs liquidity to pay administration costs or taxes. The usual response is to create liquidity that does not depend on selling stock: an appropriately owned life insurance policy, a marketable securities sleeve held outside the concentrated position, or a plan for borrowing against assets rather than liquidating them at the wrong price. ## Where trusts earn their keep Two functions matter most for executives. First, a revocable trust holding vested shares and accounts keeps the estate out of probate and lets a successor trustee act immediately, which matters when deadlines are measured in weeks. Second, irrevocable structures can move appreciating equity out of the taxable estate before a valuation event — the operative word being _before_. Timing is the whole game. Transfers made while a position is early, illiquid, or hard to value are materially different from transfers made after a run-up or an announced transaction. Whether any of this makes sense for you depends on your numbers, your state, and your tax position, and should be evaluated with your CPA. ## State residency deserves its own review An executive in New York faces a state estate tax with a cliff that can tax the entire estate once the exemption is exceeded by a margin. New Jersey has no estate tax but does impose an inheritance tax that depends on who inherits. Ohio imposes neither. Moving between our three states, or holding property in more than one, changes the analysis and sometimes the document set. ## Coordinate the beneficiary paperwork Retirement plans, deferred comp, employer life insurance, and equity accounts each carry their own beneficiary designation, and those designations control regardless of what the will says. In practice this is the most common failure we see in executive plans: careful documents undermined by a decade-old form naming a former spouse or an estate that should never have been named. ## How we work on this We build executive estate plans on a fixed fee, quoted before work begins, and coordinate with your CPA and financial advisor so the legal, tax, and investment plans point the same direction. Licensed in New York, New Jersey, and Ohio. ## Related reading - [Planning for founders, executives, and athletes](/estate-planning/founders-execs-athletes) - [Beneficiary designations quietly override your will](/blog/beneficiary-designations-override-your-will) - [The New York estate tax cliff](/blog/new-york-estate-tax-cliff) _Legal Disclaimer: This article is for informational purposes only and does not constitute legal advice or create an attorney-client relationship. Laws vary by jurisdiction and change frequently. Nothing in this post should be relied upon as a definitive legal conclusion for any specific situation. Consult a qualified attorney before taking action based on any information here._ Frequently asked ## Questions we hear most Can I gift RSUs or unvested equity to a trust? Usually not before vesting — plan documents typically prohibit transfer. Vested shares can generally be gifted, subject to company policy, insider trading rules, and any lock-up. What happens to deferred compensation at death? It is generally included in the taxable estate and remains subject to income tax when paid to beneficiaries. There is no basis step-up, so the same dollars can face both income and estate tax. Is a GRAT useful for concentrated stock? It can be well suited to a volatile, appreciating position: if the stock outperforms the required return, the excess passes to the next generation with little or no gift tax cost, and a failed GRAT largely just returns the assets. How do executives avoid a forced sale to pay estate tax? Liquidity planning: life insurance held in an ILIT, staged diversification through a written trading plan, and where eligible, deferral elections for closely held business interests. Do trading windows and 10b5-1 plans affect estate planning? Yes. Transfers, gifts, and trust funding all need to respect company policy and securities rules, so the timing of planning transactions should be coordinated with counsel and the general counsel's office. Free Download ### The Estate Planning Checklist A practical checklist covering documents, titling, beneficiary designations, and the funding steps most plans skip. Written for NY, NJ, and OH families. Send it to me Educational material only — not legal advice. Requesting the guide does not create an attorney-client relationship. We do not sell or share your email. Estate Planning Assessment ### Not sure what you need yet? A short, private assessment maps your situation to the documents and structures worth discussing — wills, revocable trusts, irrevocable planning, or administration support. [Take the 2-minute assessment →](/quiz/estate-planning) Educational only. Completing the assessment does not create an attorney-client relationship. Keep reading - [Small Estate Shortcuts in New Jersey, New York, and Ohio Estate Planning · Probate ](/blog/small-estate-shortcuts-nj-ny-oh) - [How to Put Your House in a Trust (NJ, NY, and OH) Estate Planning · Trusts ](/blog/how-to-put-your-house-in-a-trust) - [New Jersey Inheritance Tax: Who Pays, Who Is Exempt, and How Planning Changes the Math Estate Planning · New Jersey ](/blog/new-jersey-inheritance-tax-explained) [← More from the Legacy Journal](/blog)[Start Your Estate Plan](/get-started) Estate Planning & Legacy Counsel Legacy Counsel by Jacobs Counsel. Fixed-fee estate planning, trusts, wills, and generational wealth strategy for high-net-worth families. 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