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Raj is a Bay Area native and a recent retiree. He spent his career in high-tech companies, eventually becoming an independent tech consultant. Raj is a self-proclaimed Apply fanboy, accumulating about $6 Million in Apple stock over the past decade – which makes up the majority of his portfolio. Realizing that he needed to generate income from his assets, Raj became fearful and anxious about having nearly all of his proverbial eggs in one basket. He knew he needed to diversify out of his concentrated Apple position and that doing so without proper planning and guidance would have severe tax implications.
Raj needed a tax-efficient strategy for generating income from his portfolio and diversifying his highly concentrated position.
Through the discovery process, Raj’s Summitry advisory team learned that while Raj is single without any dependents, he has a clear idea of where he intends to distribute his assets: one third to his sibling, one third to his dear friend, and one third to his favorite charity.The advisory team immediately determined that a charitable remainder unitrust (CRUT) would be an effective way to diversify his concentrated position while deferring taxes and generating a comfortable income stream. After gathering details around Raj’s anticipated living expenses and objectives, the team proposed placing $3 million of the Apple stock in the CRUT and drawing 7% annually, generating roughly $135,000 of annual post-tax income for his lifetime, which goes a long way to help Raj to keep living his best Bay Area life. Raj also maintains his fanboy status having kept 25% of his position in Apple ($1.5 million) in an IRA.
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*Actual client situation with the names changed for privacy. Please see disclaimer below.
This case study contains an actual client situation with the names changed in which Summitry has provided financial planning advice. There is no guarantee that similar results will be achieved for other financial planning clients. It is unknown if the clients on which this case study is based approved or disapproved of Summitry's services. Summitry's advice is based each client's specific situation and contains multiple factors. Summitry may make recommendations to one client that may differ from the advice given to another client. Summitry may suggest strategies that require legal services to implement, but Summitry does not provide legal advice.
Schedule a talk with one of our advisors to learn more about Summitry and how we can help you chart a path for your financial future.