Primary Goals:

• Financially independent by 60, making work optional and spending time how she wished
• Outsource wealth responsibilities to an expert
• Devise a plan that optimizes her investments and benefits:
• Profit sharing assets
• Personal assets
• Deferred compensation plan
• Equity compensation (in the form of options, restricted stock units (RSU’s) and Performance-Based Restricted Stock Units (PSUs)) and employee stock purchase plan (ESPP)
• Disability insurance
• Life insurance
• Health insurance
• Directors and officer insurance
• Property insurance.
• Evaluate her stock concentration and create and implement an investment plan that removes some or most of the risks.
• In case of an untimely death ensure her family can continue on with their lifestyle and education
• Reduce taxes where possible
• Provide guidance on her current planned transition

Results Executed:

Transition Planning

• Created a compensation and benefits score card to compare to her offer. Used this to help structure the compensation and benefits negotiations.
• Asked and negotiated for a severance package if things didn’t work out with the new firm.
• Reviewed non-compete clause and separation policies of current and old firm to evaluate risks on new employment.
• Reviewed negotiating approaches to consider when negotiating for a new position.
• Reviewed and advised on the tax implications in the transition and used those in negotiations.

Wealth Enhancement and Tax Planning

• Removed stock concentration risk and created one diversified portfolio across all accounts (reducing taxes) that attempted to maximize expected return and considered Jessica’s specific risks.
• Evaluated Jessica’s cash flow and reduced income, taking full advantage of her benefit programs to reduce taxes. Additionally, minimized taxes on equity transactions and harvested losses when possible.
• Utilized a Health Savings Account to reduce current and future taxes.
• Developed a Roth conversion planning strategy to reduce life time taxes.

Asset Protection and Estate Planning

• Evaluated insurable risks both inside the benefits at the new company and personally and, collaborated with Jessica and other experts on the best policies and mitigation for her.
• Evaluated uninsurable risks and collaborated with Jessica and other experts on how to mitigate those risks in the form of legal structures and best practices.
• Evaluated the protection and safety of assets, collaborated on costs and other approaches to protect the exposed assets.
• Evaluated estate wishes and taxes, collaboratively developed a plan prior to bringing in an estate attorney with the appropriate experience to provide the expertise and execute the plan.

Disclosure

Note: The above case study is hypothetical and does not involve an actual Pacific Capital Works client. No portion of the content should be construed by a client or prospective client as a guarantee that he/she will experience the same or certain level of results or satisfaction if Pacific Capital Works is engaged to provide investment advisory services.