Step 4 · Proposed allocation

The proposed portfolio

Capital is divided into purpose-driven buckets, each matched to a specific strategy. Every recommendation carries its rationale, the criteria behind it, and the alternatives that were considered and rejected.

Plan the transition

Model portfolio

Every sleeve in this proposal is drawn from one model — Tax-Aware Balanced Growth. Switch models to re-base all sleeves; you can still fine-tune each bucket from within the chosen model.

Target structure

$15M across 5 buckets

Liquidity8.0%
Income11.1%
Growth29.2%
Concentrated Position37.9%
Legacy13.9%

Drag the dividers on the donut to shift dollars between neighbors, or click an amount to set it directly. Each change is recorded and reopens plan sign-off.

Liquidity

$1,200,000 · 8.0% of plan

Recommended strategy

Laddered U.S. Treasury Bills (3–24mo)

Target return 4.5% · ~$54K/yr

  • rungs: 8
  • maxMaturityMonths: 24
  • stateExempt: true

Selection criteria

  • Capital preservation + same-week liquidity
  • Treasury interest exempt from state income tax (valuable for high-tax states)
  • No credit risk; ladder smooths reinvestment

Alternatives considered

  • Prime money market fund — Marginally higher yield but state-taxable and carries credit exposure.
  • Short-term bond ETF — Adds duration and credit risk inappropriate for the reserve sleeve.

Income

$1,660,909 · 11.1% of plan

Recommended strategy

Allspring Core Plus Fixed Income

Target return 5.0% · ~$83K/yr

Expected income 4.6% · ~$76.4K/yr cash

  • manager: Allspring
  • vehicle: SMA
  • fee: 0.25%
  • model: AB HNY 60/40

Selection criteria

  • Cash-flow durability over price appreciation
  • Tax-aware: municipal sleeve where bracket warrants
  • Overlay capped to avoid capping too much upside

Alternatives considered

  • High-yield credit — Yield is attractive but default risk is misaligned with this bucket’s role.
  • Pure dividend equity — Concentrates sector risk; overlay achieves yield more efficiently.

Growth

$4,376,364 · 29.2% of plan

Recommended strategy

Aris Tax-Managed U.S. Core Equity

Target return 7.0% · ~$306.3K/yr

  • manager: Aris
  • vehicle: SMA
  • fee: 0.30%
  • model: AB HNY 60/40

Selection criteria

  • Long horizon supports an equity-tilted core
  • Direct indexing generates harvestable losses to fund the transition
  • Alternatives sleeve $1,094,091 (25% of growth), sized to the client's 25% illiquidity capacity
  • Eligibility confirmed (accredited) — alternatives unlocked

Alternatives considered

  • ETF-only core — Simpler but forfeits the tax-loss-harvesting engine that funds the transition.
  • Single-manager active fund — Higher fee and manager risk without commensurate after-tax benefit.

Concentrated Position

$5,680,000 · 37.9% of plan

Recommended strategy

Protective Collar / VPF Overlay

Target return 6.0% · ~$340.8K/yr

  • downsideFloorPct: 90
  • upsideCapPct: 115
  • termMonths: 18

Selection criteria

  • Avoid realizing a large embedded gain all at once
  • Define downside while retaining measured upside
  • Bridges to a multi-year, budgeted unwind

Alternatives considered

  • Exchange fund — Viable; requires 7-year lockup — kept as a secondary option.
  • Outright sale — Triggers the full embedded gain in one tax year — rejected.

Legacy

$2,082,727 · 13.9% of plan

Recommended strategy

AB Concentrated Intl Growth

Target return 8.0% · ~$166.6K/yr

  • manager: AllianceBernstein
  • vehicle: SMA
  • fee: 0.50%
  • model: AB HNY 60/40

Selection criteria

  • Longest horizon of any bucket
  • Illiquidity premium is acceptable here
  • Estate-aware: basis step-up favors holding low-basis growth

Alternatives considered

  • Taxable bond ladder — Too conservative for multi-decade legacy capital.
  • Immediate gifting — Estate strategy, but outside the scope of this investment proposal.