Welcome to Venturi Private Wealth’s pre-transaction planning guide. This resource is intended to assist business owners, entrepreneurs, and individuals/families with significant wealth in preparing for a major liquidity event. Properly managing financial and personal considerations ahead of the transaction can make a significant difference in your post-transaction financial well-being.
1. Liquidity and Cash Flow
Transaction Structure and Timeline Review:
Examine the proposed structure and ensure the transaction timeline aligns with both your short-term and long-term financial objectives, factoring in potential market shifts.
Understanding the Forms of Payment:
Gain clarity on the different forms of compensation you may receive (e.g., cash, equity, or earn-outs) to ensure they align with your financial strategy and risk preferences.
Income Implications:
Distinguish between regular income and capital gains to more accurately predict tax liability and optimize your financial planning.
Deferred Compensation Choices:
Evaluate deferred compensation options carefully, as they could offer tax advantages while aligning with your cash flow requirements.
Tax Planning:
Prepare for any substantial tax liabilities, including investment income tax, gift taxes, foreign taxes, or multi-state tax responsibilities, to avoid surprises and ensure compliance.
2. Wealth Transfer Goals
Valuation Strategies:
Explore whether a pre-transaction gift/transfer could help maximize the transfer of wealth to future generations.
Estate Plan Updates:
Review and update your estate plan to ensure that your assets are appropriately directed to your heirs. Set clear goals for when and how much wealth should be transferred to beneficiaries.
Balancing Present Needs with Legacy Plans:
Determine the best time and amounts for transferring assets to strike a balance between your lifetime financial needs and legacy goals.
Are You Exit Ready?
3. Risk Management
Risk Exposure Review:
Identify potential risks and assess whether those risks are covered by insurance or need to be self-managed.
Asset Protection:
Ensure assets are properly titled and potentially shielded from creditor claims.
Hedging and Monetization Techniques:
Examine strategies for managing concentrated wealth (such as equity or stock) to minimize risk.
4. Investment Strategy
Asset Allocation Review:
Analyze your current asset allocation and make adjustments based on your post-transaction objectives.
Exposure to Concentrated Asset Classes:
Evaluate your exposure to concentrated investments and explore potential diversification opportunities.
Tax-Efficient Investment Planning:
Review tax strategies for your portfolio, including the optimal location of assets for minimizing taxes.
Opportunities for Tax-Loss Harvesting:
Identify potential capital losses that could offset gains from the transaction.
Portfolio Income and Tax Impact:
Assess the expected income from your portfolio and its associated tax implications.
Want to Discuss Your Upcoming Liquidity Event?
Schedule a call below to speak with an advisor on our team.