Neither Jonathan nor Lauren inherited their wealth. They dedicated their careers to building several successful consumer packaged goods companies. As they prepared to exit their most successful venture yet, they looked forward to starting a new chapter in their careers, even though they were only in their early 50s.
Outside of business, Jonathan had amassed a significant wine collection, co-owned several restaurants, and cherished moments at their lakeside family home. On the other hand, Lauren served on multiple non-profit boards and had made several private investments as part of a women’s collective, focusing on angel investments in social-purpose startups.
As entrepreneurs, they recognized a seismic shift in consumer preferences towards conscious consumerism, where people prioritize companies that align with their values. Their latest venture had made significant efforts to reduce its environmental footprint. Moreover, Lauren was keen to explore how businesses could further support gender equality.
Exiting their business would require meticulous planning. Despite their financial success, many depended on them. Lauren’s parents, facing deteriorating health, needed full-time care. Several of Jonathan’s extended family members, grappling with both physical and mental health challenges, relied on him for medical expenses. All these responsibilities were in addition to the substantial costs of maintaining their current lifestyle.
Before they transitioned to social-purpose businesses and impact investing, they wanted assurance. They needed to know that their wealth would support their next venture, cover all commitments, sustain their lifestyle, facilitate charitable endeavours, and provide for their descendants.
Our Role in Their Story
The intricacies of Jonathan and Lauren’s financial landscape meant that crafting a comprehensive strategy was essential. Our first step was to prioritize, focusing on their imminent business exit and subsequent career aspirations.
We initiated a visual representation of their corporate structure, an endeavour their previous accountant hadn’t undertaken. This exercise highlighted potential tax and risk vulnerabilities. Given their dissatisfaction with their current accountant, we introduced them to a more suitable professional. We established a new holding company, set up a family trust, and revamped their corporate framework.
Our strategy also encompassed tax minimization for the substantial profit they’d realize from their business sale. We explored avenues like income splitting and trust structures, including an Individual Pension Plan (IPP) and a Retirement Compensation Arrangement (RCA).
For clarity, we compiled a Master Directory for the family – a comprehensive ledger of their assets, liabilities, and contacts for trusted advisors. This invaluable tool ensured that, in any unforeseen circumstance, their heirs would have a clear financial snapshot.
Our projections vividly depicted their financial future, factoring in income, expenses, investment returns, tax implications, and more. This roadmap illuminated how much they could channel into their next social-purpose venture without jeopardizing their other financial aspirations.
We also assisted them in establishing a family foundation. This move provided immediate tax relief from their business sale proceeds and gave them the luxury of time to allocate those funds thoughtfully. It became a family affair, with their children taking the lead in nominating causes and vetting charitable organizations.
As Jonathan and Lauren embarked on their new roles as social entrepreneurs and impact investors, we connected them with fellow visionaries in the social finance arena. This network introduced them to like-minded peers, paving the way for collaborations and capital opportunities for their next venture.
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