After you sell your business, you may likely describe the selling process as distracting and exhausting. Working under these conditions, it really isn’t a surprise that most people who have sold a business have work to do, post-sale, to truly understand their new financial situations, and to grow the proceeds they received from selling their businesses.
1. Find a Registered Investment Advisor to Help You
Registered Investment Advisors can help you grow the proceeds you received (or are receiving) from selling your business. They can help guide you as you plan and transition to life after the sale. Bound by fiduciary duty, Registered Investment Advisory will place your interests above theirs.
2. Take a Fresh Look at Your Situation
There’s no better time than just after the sale of a business to get a macro view of your new situation. What assets do you have? What liabilities do you have? Has money been set aside to pay taxes on the sale? You certainly need money for living expenses – but which funds should be accessed, and how and when, to minimize tax obligations? Your CPA and/or Registered Investment Advisor can provide valuable insight to such questions. Our recent blog post, “Will Selling Your Business Fund Your Retirement” can provide additional insight as you take a fresh look at your situation.
3. Organize Your Finances
Is your money divided up and parked in several places? If it is, this is a good time to make sure you know what is where. Perhaps you have money in a family trust, or in a holding company, or spread across a handful of family accounts. Take the time and make the effort to put together a master “score card” so you have this critical information easily available when you need to make important decisions. Also, consider consolidating accounts where possible, in an effort to simplify your affairs.
4. Get an Estimate of Taxes Due (and When)
There are many viable strategies for reducing and/or deferring your tax liability after the business sale, and you should review and understand each one. We can work with your CPA to determine how much money to set aside for the taxes due.
5. Review Your Estate Plan
Are your insurance beneficiaries, your will and your estate in alignment? Does your will may still include language about distributing shares in a company that you no longer own? Reviewing your estate plan – and making necessary adjustments immediately — is a must after selling your business, because of the way things may have changed.
Anatoliy Cherevach is a Chartered Financial Analyst and a Portfolio Manager with Kunath Karren Rinne & Atkin, LLC, with over 19 years of portfolio management and security analysis experience. Prior to joining KKRA, he was a Portfolio Manager and Research Analyst with Cohen & Steers. Anatoliy holds an MBA in finance from Pacific Lutheran University. He is an active member of the CFA Institute and CFA Society Seattle.kkra, Selling Your Business