As Benjamin Franklin famously warned, “In this world nothing can be certain but death and taxes.” Yet most successful entrepreneurs fail to prepare for these certainties until they are well into middle age and often only after they have sold their businesses for tens of millions of dollars. Perhaps the natural optimism that most really successful entrepreneurs have (which fuels their ability to take risks building a business) blinds them to their own mortality.

I realize that many readers, particularly young ones, are asking why they need to consider life insurance or estate planning when they don’t yet have a family or an estate. But preparing early can make the difference between preserving a company after an unexpected death or losing it—and it can save literally millions of dollars for your family and the causes you care about.

Let’s start with life insurance, a simple enough idea and often what ends up paying the estate taxes when an entrepreneur’s journey comes to its final end. Many books have been written about the pros and cons of the seemingly limitless varieties of life insurance. Here’s how I look at it: Assuming you’re healthy, the younger you are when you acquire life insurance coverage, the cheaper it will be. And although life insurance can be merely a reasonable investment if you live out your full life expectancy, if you die prematurely, your investment can produce a dramatically higher return and may save you from having to liquidate assets you want to pass on to your heirs, such as businesses, buildings, farms, and even art.

In past decades, you could find many life insurance policies that would be expected to earn (or even guaranteed to earn) 7 percent per annum or more. Today, however, the returns are likely to be 5 percent or less. If your life insurance policy is owned by your heirs, you can think of the 5 percent compounded return as tax free and estate free. That is nothing to sneeze at in the current environment! If you live longer than your life expectancy, the rate of return will decline. But if you die earlier, it will go up. If you die much earlier, the rate of return will go up a lot—perhaps dramatically. Imagine a $5 million life insurance policy for which the insured pays $30,000 per year in premiums. The insurance company expects to receive and invest those premiums for 20 or 30 years. If the insured dies unexpectedly in the third year, his $90,000 investment has yielded $5 million.

I am generally referring to the type of life insurance where one pays premiums for a period of years and then the insured is covered for many more years after that (or until death). Because a portion of those early payments is invested by the insurance company, the policy earns a rate of return on those payments in addition to the guaranteed benefits it pays at death. Rather than getting lost in the weeds, it is easier to just think about total payments made, total death benefits received, and the financial return implied by that stream of payments and, ultimately, receipts. Of course, there are endless insurance options, and I am not a broker (or prepared to offer insurance advice). Suffice it to say that for a young entrepreneur, the right kind of life insurance can be more valuable than it seems at first glance.

For me, life insurance is sort of like a lawn mower. If you live in an apartment or in the desert, buying one is a waste of money. But there are circumstances that are often particularly relevant to entrepreneurs—say if they own farms, real estate, private companies, or illiquid assets—where a life insurance policy can dramatically increase the net proceeds they can leave to their heirs. In many cases, the right kind of life insurance and estate structure avoids having to liquidate assets (to pay estate taxes) that one hopes to pass on to future generations. Or maybe it’s just a terrible time to sell; perhaps the death of the insured has had a disastrous effect on the business because assets haven’t matured to full value, or because real estate prices are in a temporary swoon. In those cases, there are few other tools that are remotely as effective as life insurance.

All this brings to mind a fable:

I live in Alexandria, Virginia. Near the Supreme Court chambers is a toll bridge across the Potomac. When in a rush, I pay the dollar toll and get home early. However, I usually drive outside the downtown section of the city and cross the Potomac on a free bridge.

This bridge was placed outside the downtown Washington, DC, area to serve a useful social service: getting drivers to drive the extra mile to help alleviate congestion during rush hour.

If I went over the toll bridge and through the barrier without paying the toll, I would be committing tax evasion.

If, however, I drive the extra mile outside the city of Washington and take the free bridge, I am using a legitimate, logical, and suitable method of tax avoidance, and I am performing a useful social service by doing so.

For my tax evasion, I should be punished. For my tax avoidance, I should be commended.

The tragedy of life is that so few people know that the free bridge even exists!¹

Most of us legitimately avoid paying taxes all the time and may not even realize it. Every person with a life insurance policy, an IRA, or who has made a tax-deductible contribution to a school, church, or any other favorite charity has crossed that free bridge of legitimate tax avoidance.

Which brings us to the much more complicated issue that so many brilliant entrepreneurs I know tend to be quite dim about: tax and estate planning.