Case Study

Congratulations On Your Windfall—Now Keep Your Goals On Track

Congratulations On Your Windfall—Now Keep Your Goals On Track

After years of earning a modest salary as he focused on expanding his biotech business, a president and CEO sold his company to a large pharmaceutical corporation—and suddenly he was facing a life-changing windfall.

He and his wife, both in their 50s and fiscally conservative, had to address the surprising complexity of their new financial situation, affecting every aspect of their family and their lifestyle.

They had three children, two in college and one about to be married. Avid golfers, they were considering buying a second home in South Florida, where the family often vacationed. And because he had recently lost a sibling to cancer, he and his wife valued spending more time with their children.

To confront the biggest financial decisions of their lives, they turned to their wealth advisor for guidance.

Funding more family time—and a second home

Given their personal goals, their wealth advisor reviewed the couple’s finances, analyzed their income, spending and investments, and used financial projections to help them evaluate the likelihood of achieving their goals under various scenarios.

The couple assessed the benefits and tradeoffs of whether he would work until age 62 or age 65, and whether they liquidated assets to pay for their daughter’s wedding versus setting up a home equity line of credit to fund it. 

With a clear picture of how these choices would affect their wealth, the couple could make decisions with confidence. They invested a significant portion of their new wealth in a long-term diversified portfolio, helping them retire and devote time to their family. They did purchase the South Florida vacation home—and hosted their daughter’s wedding there. 

Taking care of community and family

To honor the memory of the CEO’s sibling, he and his wife prioritized support for cancer research, and created a donor-advised fund (DAF).

Moving assets to the DAF gave the couple a tax deduction for charitable giving, offsetting the high taxes on the sudden windfall from the sale of their business. Opening the DAF also gave them time to choose cancer research organizations to fund.

Wanting to provide for their children as well, the couple used some of their lifetime gift tax exemption to move assets into an irrevocable trust, to pass those assets down to their children in a way that protected this wealth from taxes and liabilities.

A dynamic family’s evolving outlook

The CEO and his wife appreciated the depth of advisory resources available to them and their family, taking great comfort in knowing they could find smart, useful guidance for so many aspects of their financial lives. This family continues to refine its strategy and is now exploring longer-term philanthropic endeavors in its community.

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