Life Beyond Your Business: Planning for Wealth Preservation

For years, your business has been your primary asset, and the source of income needed to maintain your lifestyle. Now, with your balance sheet changing, careful management of income and risk are critical considerations. All of this can present complications for families as they attempt to navigate the necessary adjustments to support a desired lifestyle and sustain their wealth across generations.

The sale of your business is a liquidity event that can significantly increase your wealth in a short period of time. Having a plan in place for the transition of wealth from the business to a well-conceived investment strategy frees you to focus on living the life you have always envisioned. Beyond an investment strategy, business owners should complete a holistic review of their wealth plan and incorporate life ambitions and legacy aspirations. This generally includes the following:

The Intentional Use of Your Money

Often neglected in the flurry of legal documents and issues that need to be addressed when selling a business is the critical discussion of the life-changing implications of a large liquidity event. Having these discussions, along with a vision for how you want to use your money, is vital for several reasons:

• Providing a more secure retirement – If you and your family want ongoing income to support your retirement, or continuance of company provided benefits, there may be ways to structure the sale of your business to achieve these.
• Plan for major purchases – It’s not uncommon for exiting business owners to celebrate the "ringing of the bell" by splurging on big-ticket items such as a luxury car, vacation home, or ranch. These purchases should be incorporated into your wealth plan.
• Your ambition for a good life – Following a liquidity event, your wealth will likely expand, which can secure your financial future. But what are your new priorities? What is your new purpose in life? How will you use your wealth to achieve your legacy and potential philanthropy goals? Do you and your spouse share the same ambitions? These discussions must begin at home before the business is sold.

Growing and Preserving Your Assets

A diversified investment portfolio serves the essential purpose of preserving your wealth and providing a backstop for your family’s security. For business owners, family wealth has been built through concentration in their business, but ultimately, it is preserved through diversification.

To ensure your post-sale assets continue to grow and are preserved for future generations, it is essential to have a well-diversified investment strategy based on your specific objectives and risk tolerance.

Planning Your Estate

Estate planning is an essential component for tax management and the achievement of family legacy goals. An estate planning attorney and CPA are critical advisors to engage early in the process.

Plan Around Your Lifestyle

It takes extensive preparation – financially and emotionally, to ensure the successful transition of wealth so that it can be preserved and redeployed to fund new ambitions. There is no more critical time to have a trusted advisor with deep experience working to help manage a once-in-a-lifetime transition. 

• Clearly define your financial objectives using realistic values and growth assumptions based on risk factors.
• Design an investment and cash flow strategy to support the family’s lifestyle while providing a safety net.
• Establish aspirational goals and generational intentions that can be achieved within the plan’s framework.

Such comprehensive planning typically requires the input and coordination of advisors from multiple disciplines. Your Wealth Advisor acts as the "quarterback" of the team to ensure the plan is fully integrated and implemented based on your vision.

A trusted Wealth Advisor can help you manage your new financial landscape, ensuring your income and risk objectives are met while preserving your wealth for future generations. By relying on a Wealth Advisor, you can confidently move forward, knowing your financial future is secure and your aspirations are within reach. This holistic approach not only safeguards your assets but also empowers you to live the life you've always envisioned.