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Tips for personal financial planning before a transaction

Selling is a big change—for the company and for you individually. You may be facing sophisticated personal wealth planning for the first time.

At SEI Private Wealth Management, we know it is important to start your planning process early. We have included some steps to get you started, ideally one year in advance of the transition.

1. Build your team
  • Identify trusted advisors who will work proactively together to support your transition.
  • Include a financial advisor, a certified public accountant, an estate planning attorney and other professional advisors—all must have experience with sophisticated business transactions.
2. Get organized
  • Understand the differences between the assets that you have—incentive stock options (IS0), nonqualified
    stock options (NQSO), restricted stock units (RSU), qualified small business stock (QSBS), retirement plans, deferred comp, and insurance plans.
  • Have copies of all plan documents and personal HR documents (i.e., employment agreement, nondisclosure, other related documents).
  • Leverage your team to understand how the transaction will impact assets and what your legal obligations are.
  • Review and understand lock-up periods and liquidity restrictions.
  • Discuss a 10b5-1 plan.
3. Set your goals
  • Conceptualize what you want and need from this transaction—for yourself, your family and your community.
  • Review any conflicts between your personal goals and those for your business, your employees and your customers; understand the risks and trade-offs.
  • Make time for discovery and reflection in your goal-setting process.
  • Think about what post-transaction success looks like and means to you.
4. Plan
  • Revise (or create) an estate plan that includes a will, healthcare directive, financial power of attorney, and potentially a living revocable trust and/or irrevocable trusts.
  • Determine your liquidity plan and evaluate cash flow and loan strategies that may exist as needed.
  • Understand tax obligations and review available tax planning strategies with your team.
  • Map out short- to long-term post-transaction investment strategies for yourself, family and community.
  • Leverage your team to capitalize on tools and resources available to you in your expanded net-worth capacity.
5. Evolve
  • Continue your self-discovery and goal setting, and let plans change as you evolve.
Start your planning process early  and request our Family Guide to Transaction Planning.

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Legal disclaimer:

SEI Private Wealth Management is an umbrella name for various wealth services provided through SEI Investments Management Corporation (SIMC), a registered investment advisor. SIMC is a wholly owned subsidiary of SEI Investments Company. Investing involves risk including possible loss of principal.

The information contained in this communication is not meant to be legal advice. This overview is intended for educational purposes only. Please consult your legal counsel for additional information.

Neither SEI nor its subsidiaries provide tax advice. Please note that (i) any discussion of U.S. tax matters contained in this communication cannot be used by you for the purpose of avoiding tax penalties; (ii) this communication was written to support the promotion or marketing of the matters addressed herein; and (iii) you should seek advice based on your particular circumstances from an independent tax advisor.