The Challenges

• Alex’s net worth (inclusive of current fund exposure) is in the 8 figures. He is not sure about how federal estate taxes impact the assets that he can transfer to his kids.

• Alex expects to receive carried interest payments of $12MM pre-tax over the next 1-2 years and is unsure of how to invest these proceeds.

• With a very busy career, Alex is concerned about his lack of focus on his personal finances.

• Alex has his money at a number of different money managers. Most of his assets are with a wealth management group that a neighbor put him in touch with. They speak every so often, however, Alex is unaware of what he is paying and lacks a solid understanding of how the advisor is managing his investments and taxes. He has never spoken with his advisor directly about how his carry should impact these decisions.

• As their personal finances have become more complex, their investments, estate plan, and taxes are very intertwined. They would like to have someone overseeing the entire process and how the pieces work together.

The Result

After a thorough review of their finances and our financial planning modeling capabilities, the results are as follows.

• Prior to the firm closing on the new fund, Axiom introduced Alex and Jess to an estate attorney with experience in working with other GPs to properly structure their estates. We attended the meeting with them so that we were able to also understand the structure of the trusts that are being implemented.

• We recommend a tax-efficient, diversified, investment proposal for their current assets. We also implemented a 12-month phase-in schedule to invest their carry proceeds as they are distributed.

• After looking at their current statements, we calculated their advisor and investment management fees they were paying and identified cost saving strategies.

• Provided guidance on the most tax efficient accounts to utilize for savings during his highest income years.

• Adjusted the allocation of the 529 plans that Alex and Jess set up for the kids. We also discussed the benefits of continuing to fund the plans in order to get a current year tax deduction.

Disclosure: The information provided is for educational and informational purposes only and does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor's particular investment objectives, strategies, tax status or investment horizon. All scenarios and names mentioned herein are purely fictional and have been created solely for training purposes. Any resemblance to existing situations, persons or fictional characters is coincidental. The information presented should not be used as the basis for any specific investment advice.