Strategic Planning for Widowhood and Legacy
Eleanor inherited a significant Traditional IRA ($1.8M) and taxable accounts ($450K) upon her husband's passing. A portion of the taxable accounts included a private equity stake in a regional manufacturing company, valued at approximately $200,000. She needed help understanding the true value of the private equity stake, generating reliable income, and restructuring her estate to minimize taxes and ensure her long-term financial well-being.
Using the EBITDA Multiple Calculator, we analyzed the manufacturing company's financial statements, including its EBITDA, to determine its Enterprise Value. We compared this to similar publicly traded companies to arrive at a realistic valuation, which ultimately affirmed the initial $200,000 valuation was reasonable. We then used the Tax Equivalent Yield calculator to compare taxable bond yields to tax-advantaged municipal bond yields, ensuring the optimal fixed income investment strategy. Finally, we employed the Debt-to-Asset Ratio calculator to evaluate the financial health of potential alternative investments being considered for Eleanor's portfolio, ensuring alignment with her risk tolerance and income needs.
The advisor inputted the company's EBITDA, revenue, and debt information into the EBITDA Multiple Calculator. The Tax Equivalent Yield calculator compared various investment options, factoring in Eleanor's tax bracket. The Debt-to-Asset ratio was quickly assessed for several prospective holdings using available data.
$17,000 increase in annual income through optimized asset allocation and tax-efficient investment strategies.
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