If your wealth is tied up in a closely held business, lack of liquidity can create estate planning challenges. Selling your business shares to an employee stock ownership plan (ESOP) converts them into liquid assets. If the ESOP owns more than 30% of the company’s outstanding common stock immediately after the sale, you may be able to defer capital gains tax by reinvesting the proceeds in qualified replacement property (QRP). If you hold the QRP for life, your heirs receive a stepped-up basis in the assets, eliminating capital gains permanently.