A married 57 year-old with three children was an executive for a fortune 500 company. His net worth was $12 million, $3 million of which was in restricted stock and $5 million of which was in other liquid investments. He was a sophisticated investor but knew he couldn’t do it all by himself. He had concerns about the stock market and the fact that his company stock was near its all-time high.
- Confirm that he was on track to retire at age 65 with sufficient money for him and his family to live comfortably for the rest of their lives.
- Determine how best to invest his money while protecting himself from the risk of a downturn, especially in his restricted stock.
- Provide a college education for his five grandchildren.
- Protect all assets for his wife should he pass away prematurely; and ultimately protect all assets left to his children and grandchildren from creditors and a potential divorce.
- Avoid probate due to the unnecessary publicity it can cause.
- Use financial modeling to confirm that they have sufficient funds to accomplish their life goals with a portfolio allocation they are comfortable with.
- Globally allocate all investment assets earmarked for retirement, which could include the restricted stock, 401k, IRA’s and taxable investments.
- Utilize stock options to limit the downside risk on his restricted stock.
- Establish savings plans earmarked for college for the five grandchildren.
- Establish estate documents that could help avoid probate and provide asset protection for the surviving spouse.
- Create a trust (or trusts) for their children that could be protected from creditors and divorcing spouses.