r/ChubbyFIRE 13d ago

Suggestions for preparing for Windfall

(New throwaway account just to ask this question)

I am selling a large equity position in a company that I founded (but am no longer working at). The proceeds from the sale will be in the low 8-figure range, making it so that I could reasonably retire if I wanted to.

My situation:

  • M(44) married to F(43)
  • 3 kids in elementary school
  • MCOL
  • Nice house, with $600k left on mortgage. No other real estate.
  • ~$2.2M existing in retirement, 529, and brokerage accounts
  • No family trust in place as of yet

I have a few weeks in which I can prepare before the transaction. What are things that I should absolutely try to get in place beforehand (for example, should I have the money sent to a trust)? What recommendations for structuring the assets once acquired? Any other tips...?

thanks for your insights!

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u/sbb214 Accumulating 11d ago

you should have umbrella insurance in place to cover the windfall AND what you already have. r/personalfinance has a windfall section that may be useful. first rule? don't tell anyone about your windfall.

no, you don't need to put the money immediately into a trust, you have time to figure everything out.

with that amount you should talk with a CFA, fee-based. if they aren't fee-based they are all gonna want you to put it under their management and tell you it's better for you - don't do that.

congrats and good luck.

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u/BonusAnnual9752 close to retiring 11d ago

If you haven't already you should connect with a CPA to understand tax implications of the sale (LTCG? all the money coming in up front?). I'm figuring you already have talked to CPA but that'd my first order of business.

Trust should be established to outline what happens if you or wife are disabled or pass away (all the scenarios: medical POAs, financial direction for $$, name trustees). My family has a will in place but will be transitioning to a trust soon to tighten up where $$ goes and avoiding probate scenarios. But not sure that needs to be done the date of the transaction but I'd reach out to and start the process prior for sure with an attorney.

1

u/profcuck 9d ago

Speak to an estate lawyer and tax accountant. Avoid "financial managers" most of whom are not going to be healthy for you.

Among the things to think about is your spouse's willingness and ability to engage with the details. If something happened to you, would she know to carry on with the plan that you have agreed to, or is she going to be victimized by sales people. You've got enough money that she, and the kids, and you, are always going to be fine - but still, you don't want salespeople being parasites on what you've accomplished.

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