Case Studies

Rhett

Tax and Investments

Rhett is an executive at an investment bank. He is a key employee and is well remunerated by salary and a complex employee package that includes company shares that vest over timeframes of 3 to 5 years. The business has him regularly travelling the country and internationally, around 150 days a year as his skill set is in huge demand with very long hours. He spends much of his time away from his wife and four children and has plans to retire early.  Rhett knew he was busy and had envisaged an early retirement but couldn’t stop long enough to find the time to map out his future – to use the term “time poor” would be an understatement. He was referred to Crystal Wealth Partners and we used enough of his time to get his ideal future plans mapped out with a variety of strategic recommendations:

Rhett’s Specific Needs and Objectives:

• He felt he could achieve the financial goals he set himself to retire in four years time at age 52
• His employer had specific investment restrictions so any investments in his name would be a compliance issue for him
• He and his wife had plans for the children to attend private school and not drain into capital
• The wealth he has built could be maintained and sustain the living costs his family needs into an early and long retirement
• A keen look at tax implications so as to not erode wealth
• Cash flow modelling projections to show he could “walk away from corporate life”.

The recommendations we provided contained detailed cash flow projections to show that Rhett could retire early and continue to maintain his wealth. As such we:

• Recommended he review the family trust structure as his appointer needed changing. This assisted him with asset protection
• Re-arrange the beneficiaries and include a corporate beneficiary for tax effective income disbursements
• Made significant changes to the SMSF, including account equalisation and maximising concessional contributions to build tax free income streams after age 60
• Divested employee vested shares, bonuses and surplus cash to the family trust and his wife’s personal portfolio
• Conducted a full review of his company-owned and personally held insurances to ensure his family goals could be achieved if anything happened to him, with some new recommendations included
• Instigated a combination of Crystal Wealth Managed Discretionary Account to avoid any compliance issues with his employer ensuring Rhett’s wealth did not miss out on any investment opportunities.
• Drafted a new set of estate planning documents to enable the family to ensure their wealth stayed with them and protected the youngest children even into adulthood

We showed Rhett that with some re-structuring, careful planning and an active investment management model he could meet his early retirement plans for the family.