Employees at major tech companies in Northern California frequently receive compensation packages that go beyond traditional salaries. Stock options, restricted stock units (RSUs), performance bonuses and other equity-based incentives can significantly impact one’s long-term wealth and estate planning strategy.
Without a tailored estate plan, much of that value could be lost to taxes, legal disputes or lack of direction. As a result, if you work in big tech and you either don’t have an estate plan in place or you haven’t updated an existing plan in some time, it’s going to be to your benefit to make some focused efforts now.
Key considerations
One of the most important issues you’ll want to address is the management of equity compensation. Stock options and RSUs are often tied to specific vesting schedules, tax implications and restrictions on transferability. It’s important to understand how these assets are treated upon death and whether they can be passed to heirs. Some stock plans may allow transfer upon death, while others may expire or become non-transferable. An estate plan should account for how and when to exercise options and how those assets will be distributed among beneficiaries.
Another key consideration is tax planning. Big tech professionals often find themselves in high tax brackets due to their income and investment gains. Without careful planning, estate taxes and capital gains taxes could significantly reduce the value of the estate. Tools such as irrevocable trusts, grantor-retained annuity trusts (GRATs), or charitable remainder trusts (CRTs) may help mitigate estate and gift taxes while preserving wealth for future generations. Strategic gifting during your lifetime can also reduce your taxable estate while allowing you to witness your legacy in action.
Finally, digital assets are also increasingly relevant in the tech space. Beyond traditional bank accounts and investments, many professionals in this field benefit from intellectual property and/or online business interests. These assets require specific instructions for access and transfer upon death. If digital assets are not addressed explicitly in an estate plan, they may be lost forever. Including a digital asset inventory and providing your executor with the proper permissions and knowledge to access them is going to be important as a result.
If you work in big tech, your estate planning needs go beyond the basics. A one-size-fits-all approach won’t do justice to your financial situation or long-term goals. Partnering with a skilled legal team who understands the complexities of tech industry compensation and California law is, therefore, going to be wise.
