Case Study: Helping our Client Plan Before Selling His Business

A client was planning to sell his business sometime in the next five years and wanted a clear idea of how much money he needed after tax to meet his personal needs.

The first step was to gain an understanding of how much he wanted monthly, and the client took a few months to gauge his monthly spending. RMT then prepared a plan based on several key assumptions about rate of return. The client didn’t want to assume much risk post-sale so we assumed a relatively low rate of return to provide some cushion and then prepared a sensitivity analysis based on different rates of return.

Our client thought about the level of risk that he wanted to take post-sale and in the process gained a clear understanding of the amount of capital he would need in order to feel comfortable. He also began to monitor his investments more closely and gained a better understanding of investment products, fees and risks.

We also determined that his will was out of date and worked with an estate planning lawyer to develop a will that would minimize probate fees and allow the creation of multiple trusts. By redesigning his will, our client was able to carefully consider who would manage his estate and to significantly reduce the annual income tax that his survivors would pay on the income earned from the estate.

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