Case Study: Dr. Judy Marsh
- Consider pros/cons of selling her private practice, including tax impact, closing the Profit Sharing Plan for her business, and considering cash flow changes before, during and after transaction
- Consider personal side of the decision making process, including change in flexibility, decision making and innovation when moving from an owner to an employee and part of a larger team and organization
- Impact on her greater retirement planning, such as opening new account types to supplement investing opportunities due to employer-based retirement plans and their annual contribution limits.
How we work together:
- Create a plan in collaboration with their business broker, review deals & terms together and review projections to optimize the sale of the business.
- Referral to experienced estate planning attorney and facilitate communication between trusted professionals for financial, tax and estate planning matters for efficiency and ease between those important areas.
- Ensuring family financial and lifestyle needs are addressed appropriately with estate planning, as needed, and with a consideration for potential complicating factors
- Create cash flow solutions, including order of which account type to access and impact on taxable income with an understanding of priority needs and wants during business transaction, active retirement and later retirement.
Dr. Judy was receptive to advice and we worked together to determine if she would move away from private practice and into an employee role at a medical practice in her community. She was excited to have less day-to-day decision making obligations and staff that relied on her daily. We reviewed the business offer and the employment offer and ran numbers together to determine if the changes would be financially viable. The numbers were encouraging and the lifestyle change of not running a business until retirement was a relief. Dr. Judy determined the terms of the business sale were appealing and proceeded with a tax-efficient and well-defined sale. With confidence in her financial plan, she negotiated an employment contract with the new practice that better fit her work-optional goal and created sufficient flexibility and vacation pay that sufficiently addressed her preferences.
Dr. Judy felt she had come out on top on both offers and looks forward to more free time than she has had in years.
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