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36
WORTH.COM
VOLUME 24
|
EDITION 03
San Francisco, CA
Leading Wealth Advisor
CTC | myCFO
James R. Cody, Managing Director
How do I prioritize my personal wealth
plan during the sale of my business?
By James R. Cody
Individuals and families considering
a business sale typically face a daunting intersection of planning issues.
These may include deal structure
decisions, legal and regulatory considerations, income tax minimization,
capital- sufficiency analysis, wealth
transfer and philanthropic goals.
As a deal approaches the closing stage,
an owner’s attention will be focused on
getting the deal done—and rightly so.
Yet, it is equally important that business owners not lose sight of the impact
a company sale will have upon their
personal wealth profile. Realizing the
full potential of the sale of a business
necessitates proper planning early—
before the deal closes. To ensure that
personal wealth planning doesn’t take
a backseat to the company transaction,
consider the following action items:
1) Hire a conflict-free financial quarterback to coordinate and execute integrated, personal wealth planning on
your behalf. As a business owner, you
need a personal “deal team” that is separate from your company “deal team.”
Hire a financial quarterback to focus on
the issues surrounding the transaction
and its direct impact upon your personal
wealth. Seek an independent, experienced advisor who can guide you personally and can partner well with your
company deal team—corporate legal
counsel and company CFO—as well as
your other personal advisors—your tax
advisor and estate attorney.
2) Conduct a 360-degree review
of your financial situation in conjunction with your legal, tax and
other advisors prior to the closing.
Working with your financial quarterback, ensure that all of your personal
wealth planning strategies are buttoned up and executed. For example,
you may still have time to gift/transfer ownership to your children at a
discount to the ultimate selling price
of your company. In some instances,
it might make sense to exercise stock
options early to mitigate ordinary
income recognition. Your personal
deal team can help you determine
effective planning strategies.
3) Assess and implement the tax,
legal and other planning structures
that will be necessary immediately
after the sale. Liquid wealth following the sale of a company brings new
complexity and often necessitates a
new legal, tax and financial operating
structure for the management of your
personal wealth. Key considerations
are: asset protection, anonymity and a
clear separation of business assets and
operations from your personal wealth.
4) Identify a safe placeholder for
your initial liquidity with an independent custodian that is financially
sound and has the requisite trading,
operational, service and technology
platform to serve individuals and families of material wealth. An independent
custodian will not attempt to sell you
solutions during this critical period
following a liquidity event. You will
separate the institution holding your
assets from the underlying third-party
investment managers you might ultimately choose to manage those assets.
Whether you select a bank or a brokerdealer as your custodian, choose wisely
for the placement of your initial wealth.
5) Develop the business plan for the
overall management of your liquid
wealth. Working with your financial
quarterback, develop your new investment plan for the immediate deployment of the transaction proceeds and
the long-term management of your
family’s investment capital. Consider
taking a purpose-based approach that
matches your goals with the investment strategies intended to fund them:
• Short-term strategy (near-term
planned outlays and lifestyle needs)
• Intermediate-term strategy (deployment of proceeds into new investments)
• Long-term strategy (income needs,
wealth transfer and philanthropy)
While this plan may be preliminary,
having an outline of your objectives in
advance of the closing will provide you
with peace of mind, safety and clarity.
The transition from company owner
to wealth owner can be a transformative event. If you execute these outlined
steps effectively, you will be in command of your personal wealth and will
make great strides toward optimizing
the outcome of your company sale.
CTC | myCFO is the “brand” name delivering investment advisory services through CTC myCFO, LLC, an investment adviser registered with the U.S. Securities
and Exchange Commission and a Commodity Trading Adviser registered with the Commodity Futures Trading Commission (“CFTC”), and a member of the
National Futures Association (“NFA”); trust, deposit and loan products and services through BMO Harris Bank N.A., a national bank with trust powers; and
trust services through BMO Delaware Trust Company, a Delaware limited purpose trust company. Family Office Services are not fiduciary services and are not
subject to the Investment Advisors Act of 1940 or the rules promulgated thereunder. The information contained herein should not be construed as personalized
investment advice, and should not be considered as a solicitation to buy or sell any security or engage in a particular investment strategy.
LIVE
How to reach James R. Cody
I can be reached via email at [email protected]
or by phone: 650.210.5104.
GROW
MAKE
“Realizing the full
potential of the sale of
a business necessitates
proper planning early—
before the deal closes.”
—James R. Cody
C TC | MYC FO
WHAT MAKES A GOOD
WEALTH ADVISOR…
(1) Listening to clients’
concerns, (2) an ability to
explain concepts in simple
terms and (3) a passion
for lifetime learning and
skills improvement
MY FAVORITE
VACATION SPOTS ARE…
Lake Tahoe, the Kona
coast of Hawaii and the
Eifel region of Germany
MY HOBBIES ARE…
Amateur vintage
automobile racing, skiing,
boating and spending
quality time with
family and friends
About James R. Cody
ILLUSTRATION BY KEVIN SPROULS
James R. Cody joined CTC | myCFO in 2000 and has more than 30 years of professional experience.
CTC | myCFO is a wealth-consulting firm offering independent investment advice and the comprehensive
services of a multi-family office. Mr. Cody specializes in philanthropy, estate and trust planning for
the ultra-affluent clients of CTC | myCFO, and counsels clients on sophisticated tax-saving, wealthpreservation and wealth-transfer strategies. Prior to joining CTC | myCFO, he led the estate and trust
practice group for a San Francisco area law firm, where he practiced law for over 17 years. Mr. Cody
earned a BA degree in economics from Yale University, an MBA from the Graduate School of Business
at the University of California–Berkeley and a JD from the University of California Hastings College of
the Law in San Francisco. Mr. Cody and his wife make their home in Burlingame, California.
Financial Services Experience
32 years
Compensation Method Fixed and hourly fees (planning services);
asset-based fees (investment services)
Minimum Fee for Initial Meeting
None required
Primary Custodian for Investor Assets Multiple–please inquire
Largest Client Net Worth
$5+ billion
Professional Services Provided Planning, investment advisory,
capital advisory and comprehensive family office services
Number of clients
335
Minimum Net Worth Requirement
$100 million net worth (for planning services)
$25 million in investable assets (for investment services)
Website www.ctcmycfo.com
Email [email protected]
CTC | myCFO
2200 Geng Road, Suite 100, Palo Alto, CA 94303
650.210.5104
WORTH.COM
J U N E - J U LY 2 0 1 5
079
James R. Cody
Managing Director, Estate, Trust and Philanthropy Advisory Services
CTC | myCFO
Direct: 650.210.5104
2200 Geng Rd., Suite 100 | Palo Alto, CA 94303
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