Problem
Phil found us on The Bitcoin Way podcast and thought it couldn’t hurt to talk to us and see if we could help.
He started buying bitcoin in early 2017 (against his financial advisor’s recommendation) and has progressively increased his allocation to nearly 100% outside of their home equity and a couple illiquid land investments.
Because all of his liquid investments were bitcoin within traditional and roth retirement accounts or cold storage bitcoin (that he really didn’t want to touch), he wasn’t sure where he should start pulling money from to live off first. He didn’t want to touch the cold storage bitcoin, because that was the most secure/off the radar. He didn’t want to pull from his roth accounts, because those were tax free, but even the traditional accounts didn’t feel right, because he would owe quite a bit in taxes. Phil also felt it was time to diversify now that they were in retirement, but didn’t see a sophisticated way to pull it off that he still felt confident in.
Phil had engaged an attorney already, knowing they needed to update their outdated trust from when the kids were still little, but quickly realized the attorney knew nothing about self custody bitcoin and how to properly incorporate that into an estate plan. He wanted to know, without a doubt, that his bitcoin wouldn’t go through probate and his kids could prove legal title if needed when they would inevitably spend it down the road.
The Approach
After gathering Phil’s financial information, we started working on:
Calculating his tax liability when required minimum distributions would kick in and determining what would be the best mix of spending now and lump sum roth conversions to ensure the distributions weren’t exorbitant.
Supporting Phil during his conversations with his estate attorney and educating them on how to incorporate self custody bitcoin into a trust, without sacrificing privacy or revealing private key data.
Determining his proper cash bucket allocation and the best approach to reallocating some of his bitcoin position into a medium term approach that would allow him to consistently “refill” his cash with realized gains.
Solutions
Phil is more confident than ever in his financial plan and happy he found an expert sounding board to discuss the latest news and financial events of this wild time we’re living through.
Clear order of operations to refill his cash bucket that they will live off of.
A clear tax strategy to mitigate his soon to begin required minimum distributions.
Specific spending guidelines that will help their assets easily outlive them and provide a strong inheritance for their heirs.
A plan his wife Mary easily understands and also feels confident in.
A comprehensive trust that offers privacy, protects their assets from probate, and properly incorporates cold storage bitcoin.
A documented bitcoin inheritance protocol with step-by-step instructions for Mary and their children to access the bitcoin even if they remember nothing about it or have zero technical bitcoin expertise.
$1M of their non-bitcoin assets now managed under our Fluvius strategy, offering adaptable growth, diversification, and downside protection.
Their non-retirement bitcoin remains in cold storage, secure, and optimized for sovereignty.
A buffer of low volatility assets for short term goals/spending that provides peace of mind during the temporary drawdowns in markets.
The Benefit
Now, Phil knows exactly where to pull money from for their regular travel to visit grandkids, everyday spending, and one-time large, unplanned purchases. He loves having a like-minded professional in his corner to bounce ideas off of as well.