Opportunity: The 61 year old owner of a manufacturing company was interested in selling his business when he reached 65. While intent on maximizing the amount of sale proceeds he received from the buyer, the client was most interested in paying the least amount of taxes.
Action: As planned, at age 65 the owner received an offer of $2,000,000 for the assets of his business. Immediately prior to the sale, we amended the actuarial formula under the client's Cash Balance Plan, which was designed by our pension attorneys and actuaries working closely with our corporate lawyers, so that in the year of the sale the tax deduction made possible by the Cash Balance Plan was $900,000, leaving only $1,100,000 subject to capital gains tax rates.
Result: By coordinating the client's retirement plan with the sale of his business, the attorneys and actuaries at the firm enabled the client to maximize the after-tax sales proceeds from the transaction.