5 wealth and estate planning lessons from Grumpy Cat
It's important to remind clients with sudden wealth that they're rich — on paper. Bear in mind that it took Grumpy Cat two years to get this big, and often it takes time for this and other ventures to start paying off. “Don't underestimate taxes,” Mr. Voltaggio said. Tax liabilities from unrealized capital gains lie in wait within an entrepreneur's concentrated company equity.
With famous critters, it's a little different. Your client could be on the hook for a huge tax bill stemming from taxable income if the pet ends up with a couple of endorsement deals and movies. Deals should be structured to ensure the client has enough cash to cover the taxes. “Get some cash and deferred compensation, and be mindful of the tax bill in April,” Mr. Voltaggio said. “How you'll be paid is a consideration.”