What information would you need from Sarah in order to give her sound advice?
Sarah doesn’t know what any of this stuff means- write a memo to her as if she is a client of a financial planner (should be about 3 pages). Outline the pros and cons of each type of investment and what she should consider before making a decision. Remember this is someone who does not have an MBA. You need to walk her through the correct thought process and use easy numerical examples. When using technical terminology, explain what it means and provide relevant analogies.
Discuss the taxability of the different types of assets.
Are some tax-preferred assets upon bequeath, and are there non-tax benefits to the cash?
Come up with a plan that helps “equalize” the after-tax receipts for her two children and husband (hint: the lawyer probably shouldn’t be given the 401k). This question does not need to be a memo.
