Todd Villarrubia: How Can Asset Protection Preserve Family Wealth?
- Martin Piskoric
- 2 days ago
- 5 min read
For many entrepreneurs, the early years are all about growth—building a company, creating opportunities, and chasing ambitious goals. But what happens when success arrives? How do you protect what you've built from taxes, lawsuits, creditors, and even future family disputes?
These are the questions that veteran tax attorney Todd M. Villarrubia has spent more than three decades helping business owners answer. As a board-certified estate planning expert and tax attorney, Villarrubia has worked with thousands of entrepreneurs to implement strategies designed to preserve wealth for future generations.
As he explains, wealth creation and wealth preservation require very different playbooks.
“When they're younger they're trying to grow their wealth. As you get older, the protection of that wealth becomes even more important.”
Whether you're a first-generation entrepreneur, a family business owner, or a founder preparing for a future exit, understanding the transition from wealth creation to wealth preservation could be one of the most important financial decisions you'll ever make.
Why Does Asset Protection Matter More as Wealth Grows?
Imagine a business owner who spent 20 years building a successful company. Their net worth grows from $1 million to $10 million, and eventually to $50 million. Yet their legal and financial planning remains largely unchanged. According to Villarrubia, that's one of the most common mistakes entrepreneurs make.
“The estate plan that was designed for you when you were worth a million will utterly fail when you're worth 10 million. And a plan at 10 million will fail when you reach 50 million.”
As wealth increases, so do the risks. Lawsuits, creditor claims, divorce proceedings, estate taxes, and business succession challenges can threaten assets that took decades to build.
That's why Villarrubia recommends reviewing estate and wealth-planning structures every three to five years and working with professionals who understand both estate planning and tax law.
FAQ: What Is Qualified Small Business Stock (QSBS)?
One of the most valuable tax opportunities available to entrepreneurs involves Qualified Small Business Stock (QSBS) under Section 1202 of the Internal Revenue Code.
Under current federal rules, qualifying shareholders may be able to exclude up to $15 million in capital gains from federal taxation when selling eligible stock, provided certain requirements are met, including holding stock in a qualifying C corporation. Villarrubia believes many entrepreneurs overlook this opportunity because they operate as LLCs or S corporations.
“A lot of people are LLCs or S Corps that won't be able to qualify.”
For founders planning an eventual business sale, evaluating entity structure years before an exit may create significant tax advantages. However, QSBS rules are complex and require careful planning with qualified tax professionals.
How Can Entrepreneurs Protect Wealth Across Generations?
Many entrepreneurs focus heavily on growing wealth but spend less time considering how that wealth will survive future generations. Villarrubia advocates using trust structures as a long-term protection tool.
In particular, he frequently recommends dynasty trust structures that can help preserve assets across multiple generations while potentially offering protection from creditors, lawsuits, and family disputes. Dynasty trusts are specifically designed to hold and transfer wealth over extended periods while helping reduce certain transfer tax exposures.
Consider this scenario:
A first-generation founder sells a company for tens of millions of dollars. Without proper planning, future inheritance taxes, lawsuits, divorces, or poor financial decisions could gradually erode the family's wealth. With the right structures in place, however, that wealth may continue benefiting children, grandchildren, and future generations.
This shift from inheritance planning to legacy planning is increasingly important for successful entrepreneurs worldwide.
Can Tax Planning Deliver Significant ROI?
One of Villarrubia's core philosophies is that proactive planning should generate measurable value.
His firm focuses on integrating multiple disciplines, including:
Asset protection strategies
Income tax mitigation
Capital gains tax planning
Estate tax reduction
Retirement plan optimization
He points to several often-overlooked strategies, including:
Advanced Retirement Plans
Many business owners are familiar with 401(k) plans but may know less about cash balance plans or 412(e)(3) retirement plans.
These structures can potentially allow significantly larger tax-deductible contributions than traditional retirement plans, while also providing strong asset protection benefits under federal law.
Strategic Tax Incentives
Depending on a client's circumstances, tax strategies may include:
Cost segregation studies
Captive insurance structures
Energy-related tax incentives
Film tax credits
Business succession planning
The key is understanding which strategies fit a specific business owner's goals rather than applying a one-size-fits-all solution.
Why Family Governance Matters
Protecting wealth isn't solely about taxes and legal documents.
Through Fountainhead Global, Villarrubia works with families to create:
Family constitutions
Mission statements
Shared core values
Financial literacy education programs
Regular family wealth reviews
For many entrepreneurial families, the greatest threat to wealth isn't taxation—it's a lack of communication, planning, and financial education among future generations.
Think about your own business. If your company were sold tomorrow, would the next generation know how to manage the proceeds responsibly?
That's a question every entrepreneur should consider.
The Best Time to Start Planning Is Now
One of the most powerful moments from the conversation came when Villarrubia shared a personal story about losing his father at a young age after a series of unexpected strokes.
The lesson was simple but profound: Life rarely follows a predictable timeline.
Entrepreneurs often postpone planning because they're busy growing the business. Yet waiting can eliminate valuable opportunities and expose families to unnecessary risk. As Villarrubia emphasizes, planning isn't about preparing for the worst. It's about ensuring the success you've worked so hard to achieve can continue serving your family and community for decades to come.
Key Takeaways for Entrepreneurs
If you're building a business today, consider these action steps:
Review your estate plan every three to five years.
Evaluate whether your business structure supports long-term tax goals.
Explore QSBS eligibility well before a future exit.
Consider trust-based asset protection strategies for significant wealth.
Invest in family governance and financial education.
Build a team that includes legal, tax, and financial professionals working together.
Reader Challenge
Take 15 minutes this week and answer this question:
If your business generated a major liquidity event tomorrow, would your current plan protect the wealth you've created?
Your answer may reveal opportunities worth exploring.
Conclusion
Building wealth is difficult. Preserving it across generations may be even harder.
Todd M. Villarrubia's approach combines tax planning, asset protection, estate planning, and family governance to help entrepreneurs move beyond wealth accumulation and toward lasting legacy creation. From QSBS planning and dynasty trusts to advanced retirement structures and family constitutions, the underlying message remains consistent: proactive planning creates options.
The entrepreneurs who achieve the greatest long-term impact aren't simply building businesses—they're building systems that allow wealth, values, and opportunities to endure.
Looking for your next step? Consider scheduling a review of your current estate and tax strategies, and share this article with another entrepreneur who may be focused on growth but hasn't yet started thinking about preservation.
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