Friday, October 22, 2021

Money in Motion; What’s Next?



Ask The CFP® Practitioner

“Plans are nothing. Planning is everything.” 

– Dwight D. Eisenhower

Question: My business sold and the transaction will close next quarter. What are your thoughts on how to proceed? I don’t want to overlook anything.

Answer: As with all major changes, my first recommendation is to go slowly. The financial strength, stability and integrity of the professionals and institutions you work with is critically important. There will be plenty of people who’ll be happy to offer suggestions on what you should do with the proceeds, unfortunately, all of them may not have your best interest at heart.

It’s normal to be somewhat overwhelmed. After all, this represents the culmination of your business efforts and a transition towards new opportunities. Carefully managing these funds to fulfill your goals and objectives is a serious responsibility.

Money in motion can put emotions in money. Along with financial changes, there might be lifestyle adjustments or unexpected emotional impact for you and those around you. These are reasons why we caution you to go very slowly. Here are a few tips on where to focus first to help make this a smooth and pleasant experience.


This is a good time to review your personal liability protection program. Make sure you have sufficient primary and umbrella insurance coverage in place to match your new personal net worth. Typically, a privately held business represents 80% of the owner’s net worth. The ownership of your assets has likely changed from corporate to personal meaning that your insurance planning needs a review.


Maintaining sufficient liquidity to meet any outstanding tax liabilities is a real consideration. Safeguarding those assets is likely a high priority and it’s generally best to not take risks with funds earmarked to pay taxes.

Start by looking for a financial institution that offers account protection through the Securities Protection Corporation (SIPC), various syndicates such as Lloyd’s of London for coverage in excess of SIPC, and the Federal Deposit Insurance Corporation (FDIC). Once you’ve found a “parking spot” for the proceeds, you can begin to structure your assets to provide for your future.

Working with an experienced CPA firm can literally make all the difference in the world regarding tax implications. Your sale was likely structured in the best possible way to reduce capital gains taxes. Nevertheless, discuss taking losses on any other investments prior to year- end to offset any unavoidable gains from the sale of your business. Consider making any gifts and/or charitable donations. Also, maximizing your retirement account contributions is a legitimate way to reduce taxable income. If appropriate, you can prepay any taxes and mortgage interest for current year deductions. Please refer to my May 27 column on 529 College Savings Plan Education Plan for ways to help fund children or grandchildren’s education while potentially improving an estate tax issue. Last but not least, this is the time to revisit your estate planning documents.

Big Picture 

Identify, prioritize and discuss your goals with your financial advisor. He or she will assist you in establishing and implementing a plan to match agreed upon parameters. Go slow, ask questions, and know what you own and why you own it.

For instance, is income or growth more important to you? How much income will you need? What makes you uneasy; losing wealth in the market, caring for family in the future, paying too much in taxes, and apprehension about a spendthrift family member or concern for a disabled child? Is there trepidation about a spouse remarrying, or leaving too much money to children? These are all real concerns we regularly address with clients.

The proceeds from the sale of a business may have the potential to support your income requirements for years to come. Markets, finances and people are ever changing. This is why feeling comfortable having these meaningful conversations with your financial advisor is an important ingredient reaching your goals. Build a team of professionals that you’re comfortable talking to about the ongoing needs and changes you’ll likely face in life.


Stocks, bonds and cash are the primary investments used to implement a financial plan. The amount placed in each category will vary over time to match your needs and changes in the investment arena. Regularly monitoring your investments once they’re originally selected is a crucial part of the process. Building the proper portfolio for you is a result of conversations and customization rather than a cookie-cutter approach.

Finally, do your homework and learn all you can about relevant topics. Ask your financial advisor for educational materials. Consider working with a CERTIFIED FINANCIAL PROFESSIONALTM to help guide you through a discussion of your financial needs now and into the future. Successful companies have business plans, now it’s time to create and implement your financial plan. Having a team of knowledgeable financial, legal and tax professionals by your side can help make the most of the opportunities ahead. Stay focused and plan accordingly.

Investing involves risk including the possible loss of capital. As federal and state tax rules are subject to frequent changes, you should consult with a qualified tax advisor prior to making any investment decision. There is no assurance that any investment strategy will be successful. The opinions expressed are those of the writer, but not necessarily those of Raymond James and Associates, and subject to change at any time. 

“Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNERTM, CFP® (with plaque design) and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board’s initial and ongoing certification requirements.” 

This article provided by Darcie Guerin, CFP®, Vice President, Investments & Branch Manager of Raymond James & Associates, Inc. Member New York Stock Exchange/SIPC 606 Bald Eagle Dr. Suite 401, Marco Island, FL 34145. She may be reached at 239-389-1041, or by email: Website: 

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