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QSBS, or the Qualified Small Business Stock Exemption, is one of the best tax breaks available to startup builders, and QSBS stacking can supercharge those benefits. Like most tax planning, though, timing makes all the difference. There are clear cases when it makes sense to sit tight, and clear cases when too move forward.
Your job is to recognize which camp you’re in. Our job is to make that decision easier. The goals of this article are (1) to explain the basics of QSBS stacking and (2) to help you understand when to start setting up structures for QSBS stacking and which structures to use.
Notes:
QSBS stacking allows you and your heirs to benefit from multiple QSBS exemptions. Instead of just being able to benefit from selling $10 million of equity tax free, you and/or your heirs can sell $30m or even $100m+ tax free. Stacking multiplies exemptions by gifting QSBS shares to other taxpayers before a sale so they can receive their own $10 million dollar exemption. When you gift shares to someone or an entity (such as a trust), the receivers of stock gifts continue the original owners holding period and the shares retain QSBS character – importantly this means the trust (or receiver of the stock gift) doesn’t have to hold the shares for 5 years itself but can use your holding time to meet this requirement. To stack your exemptions you must either give your shares to another person that isn’t your spouse, or give it to a type of Non-Grantor Trust (NGT/SLANT/CRT) as they are a separate taxpayer and can claim their own exemption if the trust is drafted and administered correctly.
Example. A founder expecting a $40M eligible gain could keep their own $10M exemption (for shares issued pre-7/4/2025) and give enough shares to three properly structured non-grantor trusts to benefit from selling the $40 million tax free. Each trust receives its own exemption, eliminating federal taxes on the entire gain.
Stacking is an incredible deal, and it will be the obvious choice for anyone over the QSBS exemption limit. After all, who doesn’t want more tax free gains on hard earned equity? The real question, then, is which structures to use and when to get started.
This article is on when to get started, if you want to learn about which structures to use – check out this deep dive on the topic.
Is it the right timing for you to think about QSBS Stacking?
QSBS stacking sounds great – and it is! But timing is everything. Startup builders often begin hearing from professional service vendors after an early fundraising round, and the common line is that the founder needs to set up trusts and gift their equity now. But is that the right move, right now?
To break it down into even more detail, planning for QSBS stacking isn’t a one time event but something that will continue to evolve until you’ve sold your last QSBS eligible share.
We break it down into three approaches:
Let’s start with the first and easiest category: when is it too early, and why doing it too early can be negative.
Red lights (definitely too early).
You may be wondering what the downside is of proactively planning though?
The same ingredients that make stacking powerful also make premature stacking risky.
But even when the light is green, stacking isn’t just about pulling the trigger—it’s about doing it correctly. Without the right execution, even well-timed gifts can fail to deliver the expected tax benefits. That’s where practical guardrails come in:
The framework gives you clarity on when to act. The guardrails make sure that when you do, your stacking strategy actually works.
stacking strategy actually works.
Let’s break down what that means with an example:
Scenario:
Key question: Should I start giving away assets to minimize estate taxes and stack QSBS exemptions?
Answer: It depends on how much of the assets you want to have access to control
We’ll walk through the two approaches.
Is it the right timing for you to think about QSBS Stacking?
A founder’s framework for action
The decision to stack isn’t binary—it’s a spectrum. It’s something you’ll do over time and based on how much optionality and optimization you want to have (more optimization and optionality will require more overhead though).
There are two common approaches to handling QSBS stacking and estate planning:
We’ll now walk through the best practice trust structure approach you’ll take in each approach. As you’ll see, you will use the same structures in both approaches; it’s all about ordering and timing.
For the passive management approach people will typically start gifting assets when their equity is worth more than $30m (single) or $60m (married), and they will often gift 20-35% of their equity (though you can obviously do more or less). The first trust structures you will use will either be a Non-Grantor Trust (NGT) or Spousal Lifetime Access Non-Grantor Trust (SLANT) depending on if you are married or not.
Spousal Lifetime Access Non-Grantor Trust (SLANT): A SLANT allows you to transfer wealth out of a person’s taxable estate without completely losing access to the funds. In a SLANT, one spouse (the grantor) makes a significant gift of assets into an irrevocable trust for the primary benefit of the other spouse (the beneficiary) and their kids and future heirs. By making this gift, the assets are removed from the grantor’s estate. Because the beneficiary spouse can receive distributions from the trust, the grantor still has indirect access to the gifted funds for their needs during their lifetime, minimizing the liquidity impact of the gift. Importantly the trust has its own QSBS exemption. If the QSBS assets are above the $10/$15m exemption value, the SLANT can set up its own CRTs which can receive additional $10/$15m QSBS exemptions.
Upon the death of the beneficiary spouse, the remaining assets in the SLANT typically pass to other beneficiaries, such as children or grandchildren, free of estate taxes. This allows the assets to avoid taxation in both spouses’ estates.
Non-Grantor Trust (NGT): A NGT is particularly effective for estate tax planning, as the assets transferred to the trust (and all their future appreciation) are removed from the grantor’s taxable estate. If you aren’t married, people will typically set up the NGT with their parents as the initial beneficiaries and then themselves and their heirs as future beneficiaries. This allows you to directly access the proceeds after your parents pass away. Importantly, the trust has its own QSBS exemption, and if the QSBS assets are above the $10/$15m exemption value the NGT can set up its own CRTs which can receive additional QSBS exemptions.
As you start to have more liquidity, you are going to give assets to more NGT for your heirs and CRT’s to multiply your exemptions.
| Description | Trigger(s) | Goal | Structures |
| First Gift | Equity is worth more than $20m (single) or $40m (married) | Take advantage of your equity’s low valuation to gift it outside of your estate knowing you may lose direct access to the assets | Married: Spousal Lifetime Access Non-Grantor Trust (SLANT) stacking where your spouse has access to the asset (but you do not have direct access). In addition, the assets will grow estate tax free outside of your estate. You will typically set up one of these. Unmarried: Non-Grantor Trust (NGT): Typically you’ll set this up with your parents as the beneficiaries, then you and your heirs as the beneficiaries after they pass away. This does get an additional exemption, moves assets out of your estate, and you can have direct access to the assets after your parents pass away. |
| QSBS liquidity | Credible liquidity plans greater than your personal QSBS exemption | Multiply exemptions in parallel based on expected upcoming liquidity | Personal QSBS Stacking: Charitable Remainder Trusts (CRT): You can access an additional QSBS exemption for each additional CRT you set up. 90%+ of the proceeds will come back to you, and a small portion will go to a charity of your choice for which you receive a charitable deduction |
Estate tax minimization | Personal net worth + expected after-tax proceeds will exceed both QSBS and estate tax exemption | Stack exemptions and move future appreciation outside of your estate | GRAT + NGT: Each Non-Grantor Trust can set up its own CRTs as well |
| Description | Trigger(s) | Goal | Structures |
1. Early days, complete uncertainty as to liquidity timing and amount, no estate tax pressure | You haven’t used much of your personal exemption and/or no clear liquidity timing | Use your personal cap first; protect QSBS status | Do nothing structural yet. Consider a lifetime (or multi-life) Charitable Remainder Unitrust (CRUT) if you are selling shares that aren’t QSBS eligible (e.g., before 5 years or late-exercised options) |
2. Selling shares and facing a capital gain tax bill unless you take action | Credible liquidity plans greater than your personal QSBS exemption | Multiply exemptions in parallel based on expected upcoming liquidity | Charitable Remainder Trusts (CRT): You (and potentially your spouse) can each access 2 additional QSBS exemptions. 90%+ of the proceeds will come back to you, and a small portion will go to a charity of your choice |
| 3. You have a decent idea of what your total equity might be worth, and it’s likely to be (well) above what you need. You’re no longer worried about your personal financial situation and you’re now above the estate tax limit too. | Personal net worth + expected after-tax proceeds will exceed both QSBS and estate tax exemption | Stack exemptions and move future appreciation outside of your estate | Spousal Lifetime Access Non-Grantor Trust (SLANT): Stacking for your spouse (and, by extension, yourself). Stack outside your estate but your spouse can access the assets. You will typically set up one of these. Non-Grantor Trust (NGT): Stacking for the next generation. Get an additional exemption and move assets out of your estate, but you and your spouse won’t have access to the assets. You will typically set up one or two per kid Charitable Remainder Trusts (CRT): Each Non-Grantor Trust and SLANT can set up its own CRT as well |
Founders often feel pressure to rush into QSBS stacking and complex estate structures—but for most, that solves a problem you don’t actually have yet. In the early stages, the smartest wealth-creation (and tax-reduction) strategy is still the simplest one: focus on building a valuable, QSBS-eligible company. When the facts change—credible liquidity is on the horizon, you’ve used up most of your personal exemption, or your estate tax exposure becomes real—that’s the time to act decisively and gift the right amount. Until then, your job is to build optionality. Our job at Valur is to handle the complexity in the background so you can stay focused on what matters most: building your company.
We’ve built a platform that makes advanced tax planning – once reserved for ultra-high-net-worth individuals – accessible to everyone. With Valur, you can reduce your taxes by six figures or more, at less than half the cost of traditional providers.
From selecting the right strategy to handling setup, administration, and ongoing optimization, we take care of the hard work so you don’t have to. The results speak for themselves: our customers have generated over $3 billion in additional wealth through our platform.
Want to see what Valur can do for you or your clients? Explore our Learning Center, use our online calculators to estimate your potential savings or schedule a time to chat with us today!
