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

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.