Transcript
Intro
Stephan Shipe: Welcome back to the Scholar Wealth Podcast. Today we’re looking at what employees should be thinking about as AI companies race toward potential IPOs. With valuations moving fast and equity packages getting more complex, we break down how to plan ahead when RSUs, ISOs, and sudden liquidity events all collide together.
Then we shift to a question about IRA timing. Many listeners know that they can fund an IRA up until their tax filing deadline, but the rules for Roth conversions follow a different calendar. We sort out how those two interact and what the timing means for taxes.
And in today’s from the field segment, I speak with Robyn Sechler of GoodTrust. She works with families to preserve their photos, stories, and digital assets in ways that make them more accessible for future generations, and she shares practical steps for building a meaningful digital legacy.
So let’s go ahead and get started.
Question 1 – Equity Planning Ahead of a Potential AI IPO
Listener: I make about $350,000 a year working in tech, and I’ve accumulated a mix of equity. I have 12,000 vested RSUs, another 8,000 unvested, and I exercised 5,000 incentive stock options a few years ago at $4 strike price. Based on recent valuations, those shares might be worth somewhere between $40 and $60 each if we go public. With all the news this week about AI companies racing to IPO, I’m realizing I might be looking at a big taxable event and a lot of concentration risk. What should I be doing now to prepare for a potential liquidity window or valuation spike?
Stephan Shipe: Big difference between maybe dealing with a liquidity event and actually dealing with a liquidity event. There’s no rush for you to worry about any of this. This is a classic counting your chickens before they hatch type of scenario.
We gotta be really careful about spending a bunch of time worrying about what if the company IPOs, and if it IPOs, it’ll IPO at 40, or it could IPO at 60. It could also IPO at 30, who knows what’s gonna happen. It might not IPO at all, which is the majority of the case. A lot of that has to do with the market at that time.
Whenever a company IPOs, generally that’s a time where they feel like there’s a lot of liquidity in the market. So people are risk on. So investors are looking for places to put assets in a risky way, so look for IPOs. This is why whenever you see recessions, the IPO market is flat. There’s no IPOs that’ll go out when everyone’s freaking out in the market because they’re not going to be able to raise capital for anything that they’re doing.
So regardless of what we talk about here today, you should know that this is something you should think about probably just enough to listen to this question and then ignore it and go back to work and get everything building up for a potential IPO in the future.
So when it comes to taxes, the easiest thing is you’re dealing with a lot of RSUs. The ISOs can have their own issue. The ISOs are gonna have a lot of AMT issues, which may or may not apply to you depending on what the value of everything’s going to be. But the RSUs are taxed as they vest. So as soon as those vest, they’re gonna be taxed. You’re not going to have a situation where you get a big tax bill for RSUs that you have in your account.
What you would be taxed on is if you sell the difference between what the vesting price was and what the new price was. So if you had RSUs that vested at $5 and now it’s worth 40, there’s a $35 gain there that you would have to pay tax on if you were to sell. You wanna be careful of long-term and short-term gains there. ISOs will have their own special circumstances there as well.
But the reality is, depending on the lifestyle that you’re wanting to live, you’re looking at maybe a million dollars in this case, which is not an insignificant amount, but it’s likely not enough for you to be able to go retire on. So if that’s the case, we do wanna start looking at this as a nice windfall, but not a “I’m gonna change the direction of my entire life” windfall.
So I wouldn’t worry too much about the tax implication. There’d be capital gains there if you were to sell. That assumes you’re able to sell and the lockup period is not gonna be something that is a surprise. That’s one thing that happens when people go through these IPO processes. They assume that it all hits one day and they better have a plan in place. I’m not saying that you shouldn’t have a plan in place. Of course, I think you should have a financial plan in place, but trying to plan now for something that may happen, that may happen next year, that may fluctuate between 40 to $60, is not something I like planning around.
Let’s wait until some things materialize first and then start running different scenarios when it gets a little closer of, you know it’s gonna IPO, now you just don’t know the price. Well, if that’s the case, we can start running scenarios of 40 to 50 to $60 share prices and show what the tax implications would be, what the liquidity impact would be. Do you need to free up cash? And you’ll have all of these different scenarios too, of when you can exit and how much you can exit out of.
So there’s a lot of issues that need to materialize first before we get down to the actual modeling of that. Probably a good time to take some liquidity off the table. So with that big of an increase—thousands of percent increase in the price—probably time to remove some of that. And the reason for that is not that I’m bearish against the company that you’re at or anything along those lines, but IPOs tend to underperform after they’re sold in the secondary market.
So everyone thinks IPOs are where you make a lot of money. That’s true, as long as you get in on the primary offering. If you’re in the initial primary market going from company to you personally, then those returns are pretty good. The secondary market—for instance when the shares are actually being traded—if you buy a stock that IPOed one day and you bought it that morning, your returns are typically negative. And that’s been shown time and time again.
A lot of intricacies there. But for your case right now, not something I’d worry about in a big way. I think it’s important to understand that the tax impact that you’re concerned about probably isn’t as much as you think it’s going to be because you’ve already paid the ordinary tax on the RSUs as they vested. The ones that are not vested yet—that other 8,000 shares—you’ll be taxed on those as they vest. So no issue there.
The only issue you’re gonna deal with is the capital gains on any growth from the vested price, your basis, and what you sell them for. And a lot of those, you’re gonna wanna wait for at least one year to get that long-term capital gains rate. And so based on all those, depending on when they’ve vested, you’ll probably be able to exit some of them at the beginning, then start to slowly divest over time. That’s assuming you don’t get more RSUs post-IPO from that whole process.
And now we can go on to our second question.
Question 2 – IRA Contribution Timing vs. Roth Conversion Timing
Listener: I know I can make an IRA contribution for last year up until my tax return deadline, but how does that work with Roth conversions? If I make a traditional IRA contribution right before filing, can I still convert it to a Roth for that same tax year or does the conversion timing follow a different rule?
Stephan Shipe: Two totally different calendars. You have the IRA contribution. You’re spot on with that. You can make the IRA contribution up until you file your taxes. It’s for the prior year. So when you hop into like a Vanguard or Fidelity, you go to place your IRA contribution and it’s in January. It’ll ask you, is this for 2025 or is this for 2026, let’s say.
So that’s not an issue. The conversions follow a pure calendar year timeline. So if you convert between January 1st and December 31st, you would pay any tax that was needed to be taken.
Now, in this case, going through the backdoor Roth process, kinda it sounds like where you’re going with it to be able to make a contribution and do a conversion around the same year. Because if not, then that makes absolutely no sense whatsoever to do that, because it’s just a wash. But if you’re going the backdoor Roth route and you’re making a contribution, you can go convert at any time. The conversion’s still just going to be based on your 2026 return, not your 2025 return.
So in other words, if we jump ahead here to March of 2026, you make a contribution for 2025 and you might go back and make a contribution for 2026 at that time as well because you’d be able to do both. You could go and convert that amount technically the next day and convert everything over, and that conversion wouldn’t be counted on 2025 taxes, it would be counted on 2026.
So from a practical perspective, it doesn’t make a difference, especially if you’re doing the backdoor Roth in the correct way, then you’re gonna be able to avoid the pro rata rule complications. You’re not gonna have to worry about it really being a taxable event. It’s a taxable event, but without any dollar tax implications because there’s no pre-tax money in it. So because of that, it’s not gonna matter.
Now, if you have a balance, a pre-tax balance in the accounts and you’re trying to do this, it does matter. It’s gonna matter when you make that conversion, it’s gonna matter when you make contributions, because now you’re going to have to deal with the pro rata rule. You’re gonna have to deal with how much of the account was pre-tax and how much of the account was post-tax upon conversion. So that’s when you’re gonna have possibilities of affecting things like your tax bracket or Medicare thresholds or anything like that because you are generating taxable income.
So this is really where you’ll see a lot of people, and I’m a big fan of this too, is just set a time on your calendar to make all these contributions so you don’t have to worry about this kind of stuff. Like at the beginning of the year. Go ahead, fund your IRA for the year, and so you don’t have to worry about it. So you’re not splitting it up of $500 here, $300 here to an IRA. I know sometimes that can be easy, but if you already have a taxable account or savings on the side, just go ahead and throw the $7,000 into the IRA at the same time every year, so you don’t have to worry about any of the weird timings or missing out on something as easy as being able to contribute to an IRA or doing a conversion.
From the Field – Robyn Sechler
Stephan Shipe: And for today’s From the Field conversation, we look at how digital legacy planning is becoming an essential part of modern estate planning, from photo vaults to recorded family history.
Today we’re joined by Robyn Sechler, Vice President of Partnerships at GoodTrust and founder of Securing Memories. Robyn works with families to preserve something that often gets overlooked when we talk about estate planning, which is the stories, the values, the memories that define who we are. She helps families bridge financial legacy and personal legacy by capturing meaningful moments and turning them into something that can be shared for multiple generations. Robyn, welcome to the Scholar Wealth Podcast. Why don’t we start off with you telling us a little bit about yourself, how you got into this area.
Robyn Sechler: I’m happy to. Thank you so much for inviting me today. I look forward to the conversation. This is something that is very personal and near and dear to me, so I look forward to it.
I’ll share a little bit about how I got into this because I think it sets the stage for our conversation today, and it’s really interesting. It’s timely because it’s 16 years ago today, actually, that I lost my dad. And when he was sick, I sat with him in his hospice room day after day. I didn’t really know what to talk to him about. I was young, and we had some time together in quiet moments, and so I just started asking him questions about his life.
I went down this path of the typical: Where did you meet Mom? Why did you become a teacher? Why did you leave teaching? And then I started to get a little bit deeper, more into the stories about: Tell me the things that you and your brothers fought over. Tell me the things that kept you up at night. Talk to me about your parents. Were they strict or did they let you get away with things?
And so I spent the final days with him really diving into those questions. The very last question I ever asked him was about what it was like for him to go to school as a kid. In that moment, when my dad and I were talking about it and he was telling me the sort of “uphill both ways” story, my husband walked into the room, picked up my BlackBerry device — if you remember the BlackBerrys — he pressed the record button, put the phone down, and walked out of the room.
My dad and I didn’t really realize what he had done, and so we just continued on our conversation. The next day, my dad passed away.
So with all that comes from losing somebody, my husband didn’t really recognize the importance of what he had done all those years ago when he pressed the record button. And so if I fast-forward eight years after that day, my daughter, who was born long after my dad had passed, found this BlackBerry somewhere — I still don’t know where it came from — and in her little toddler voice, she is asking if she can play with it.
In that moment, my husband realized, like, oh my goodness. It all came back to him and he said, literally, “Hold the phone. Bring it into the other room. Grab a tissue. I have a story to tell you.” And he shared how on that BlackBerry was the very last conversation that I had ever had with my dad.
Recognizing the importance of that, I won’t bore you with all the steps it took to get it off of that BlackBerry so many years later. What I did was I pulled that audio up onto the computer next to a picture of my dad, and all three of my kids — who had never had the opportunity to meet him — got to hear his voice for the first time.
So it was that day that I hung a shingle. I started a company where we set out to help families capture these family stories and these family moments, because I know that we hadn’t done a good job with it, and I don’t think very many people are thinking proactively about it either. So that’s how we got here. It’s very much driven by heart and personal experience.
Stephan Shipe: I know there’s a lot of people out there wishing they could hit record on a lot of great conversations. So how do you do that? How do you help people be able to have those memories to share with their kids and future generations — or for them to look back on and relive those conversations as well?
Robyn Sechler: It’s so interesting because people tend to think about things like estate planning as being financially driven, which is obviously a very important part of it. What we do is, at GoodTrust, we provide the opportunity for you to create your estate plan and include this digital experience along with it.
So when you have photos and videos and recordings — in my case, audio recordings — of things that you want your family members to be able to access and be able to enjoy today and into future generations, we’ve built a way that you can include your digital life into your estate plan so that your family members can find it and access it and enjoy it so it doesn’t become lost like mine did.
Stephan Shipe: When you talk about storytelling and bringing that into estate planning, is it simply a kind of a vault where someone can access all the pictures and videos that you put into it, or is there a storytelling component where it’s guided through “tell me about these types of situations” and you can have those stories? What does that look like from a practical purpose?
Robyn Sechler: So the way that we have it today is where you can include — if you have things like Google Photos or Apple Photos or videos or things like that that you have saved along the way — you can bring that into the digital vault, what we refer to as the digital vault, the place where you can store all of those assets. That way your family members can find it.
What we also — personally, what I like to think about — is having that in a more curated way because we have, I’d be embarrassed to say, but I probably have 13,000 or 14,000 photos on my phone today. And so rather than just saying, “Hey, here’s access to all of those photos and videos,” taking the time to put that in a more curated fashion and then bringing those curated pieces into the estate plan is the important part. It makes it easier for your family members to consume and more personal, for sure.
Stephan Shipe: A little bit more of some categorization there, as opposed to just thousands of photos there for everyone to dig through and try to figure out the story themselves — exactly what’s going on. Are you all incorporating AI at all into this whole world? There’s all these talking photos and living photos and everything out there. Is that an area that you all are looking at or incorporating?
Robyn Sechler: Yeah, it’s a good question. It’s hard to have a conversation today that doesn’t include the letters A and I. Absolutely. So yeah, that’s definitely a fair question. We do have a component that allows you to bring a photo to life. So if you have, in my case, a photo of my dad who has passed away and I want to attach that story to it, I can upload his audio alongside a photo and bring that photo to life where he would be essentially telling the story from just a photo. So it is a really fun way to be able to bring some new ways to consume these types of content.
Stephan Shipe: That’s really interesting. I think that’s a great way to do it. It sounds like a lot of what you had originally had, even from the BlackBerry scenario of, “Here’s a picture and here’s the audio,” but being able to bridge those two together so that way both of it is in action. Yeah, that’s really fascinating.
When you’re talking to somebody who wants to start off, what are some practical tips? Obviously, they go through the whole estate planning process and are able to pull out all these digital assets and everything. I would add on there, it’s probably just not the photos as well. It’s also passwords and access to accounts and all of that as well. Sometimes that gets lost — “I want to make sure my family has the pictures,” but they can’t access anything in my financial life without all the passwords and everything else that goes with it.
What are some tips that you could give to someone who wants to take some steps now? If somebody’s listening to this, what are two or three things that they could do that would help them at least get on that path of, “Lock these things down because that’s what we see are the most valuable”?
Robyn Sechler: Yeah. So you’re exactly right. When you think about your digital life out there and your digital footprint, we are just talking about this one section of photos and videos. But of course, there’s your online presence in terms of your social media, your email, your texts, anything that you store or create or write in a digital format. And of course, I think we could all agree that we’re gonna continue to expand that rather than decrease the amount of time that we spend online.
And so providing access to those things — your phone, your computer, your laptops for two-factor authentication — right, there are all of these digital pieces that your family members are going to need and have value, even if they’re not necessarily financial value (which some are), but others are this more sentimental value. And so providing the access to those is part of what we do.
To answer your question about what people can do today to get started with this storytelling piece, I always think about it like: let’s pretend you showed up at the grocery store, and you’re walking down the aisle when you pass somebody that you haven’t seen in 10 years. And you’re like, “Susie, hi, how are you? I haven’t seen you in 10 years — what’s new?” And Susie looks at you and she’s like, “Oh, I don’t know… not much,” because the answer is too big.
It’s too hard, in two minutes in a grocery store passing, to be able to explain all the things that happened in 10 years. And so when people begin thinking about capturing their family’s story, it often can feel overwhelming because it’s many years and many different things and many different directions that you could go.
So because of that, my suggestion is that you pick one — what I think of as legacy chapters or categories. Is it growing up? Is it your career, having children, getting married? Is it being a grandparent? Is it holidays? And as we go into the holidays now, that’s always a fun one where you get interaction from other people, potentially, you know, around the table or wherever that might be.
So really just picking sort of one category and asking and answering questions about that can be really helpful. I’ll throw out one really fun one since we’re talking about the holidays. I would imagine that, let’s say Christmas morning you have cinnamon buns at breakfast. There might be a story about why you have cinnamon buns every single Christmas morning. Who makes them? Whose recipe is it? Who started it? Where did it come from? Why do we enjoy it so much?
And even things like that — being able to go around from one recipe or one dish to another and telling the story as to why that landed on the table today. That can be one way to get that conversation started.
Stephan Shipe: That’s great. That was gonna be my next question. I was gonna ask you what the go-to Robyn icebreaker is going to be for starting those — an easy way to ease into a lot of those conversations to go deeper. Yeah, and the holidays definitely bring up great opportunities there.
As we wrap up here, is there anything else that you think of that you want to make sure you share about whether it’s preserving family memories or approaching legacy in a more meaningful way than just, “I knocked out the estate planning documents, here’s the business card for the attorney you should call if something happens to me”? What would you like everyone to know?
Robyn Sechler: You know by now that I am a storyteller, and so I would love to just leave you with one final story that is going to answer that question in and of itself.
My grandmother, when she was 98, she was diagnosed with Alzheimer’s. And she has the greatest love story of any love story I’ve ever heard. I wanted to capture this on video. So I went to her house and I brought my video camera and — lights, camera, action — I set up her space, and she sat down with her husband Rex. And I was like, “Okay, Mimi, this is your chance. Tell me your story. Tell me the love story.”
And she looks at me, and she looks around, and she was having a hard time getting started. So her husband Rex, who was sitting next to her, he’s like, “Okay, okay, Peggy — you remember? We knew each other in high school and we used to go dancing. Do you remember?” She’s like, “Yeah, yeah, okay, I remember. Yeah.”
And we could tell that she couldn’t get the story out. And so Rex told it on her behalf. I’m going to share the story with you here.
He and my grandmother — Rex and Mimi — met when they were in high school, and they used to go dancing every Friday and Saturday night all through high school. He was a year older than her. He left to go off to the war. She of course stayed here. They both ended up getting married to different people, had different lives, children of their own — funny enough, just a couple miles from each other but never crossed paths.
Until about 65 years later. And when they were in their eighties, they met and went dancing. He called her one day — and my grandmother had been single for 40 years, a single mom for 40 years — and he called her and he was like, “Hey, I heard that you happen to live up the road from me. I’d like to know if I can take you dancing.”
So of course she said yes. And off they went. And then they went again the next weekend, and the next weekend, and the next weekend.
And so he’s telling this story and I’m recording it, and I’m like tearful, and my mom is here and she’s tearful, and we’re all just feeling a lot of emotion around this. When he was done telling the story, my grandmother looked at him and she said, “That’s a really beautiful love story. Whose is it?”
And so my point is that she had forgotten her own love story. And so we never know when we’re going to begin to forget memories, or when we will no longer have the chance to be able to record these stories.
So my sort of final words or final advice is to just get started. Because none of us have a crystal ball, and it’s never too early to get started — but it can be too late.
Stephan Shipe: Great advice, and I’m so happy you’re able to join us today. I love all the stuff you’re doing out there and the mission of moving estate planning into an entirely different way to think about securing those memories. So thank you so much for joining us today.
Robyn Sechler: Of course. I appreciate the conversation. Thank you so much.
Outro
Stephan Shipe: That’s our show. New episodes come out every Monday, so be sure to subscribe and turn on your alerts so you never miss an episode!
Like how we think about wealth? You can learn more about our approach at scholaradvising.com, where we work with high net worth families on personalized planning and strategy.
Disclaimer: The information provided in this podcast is for general informational and educational purposes only, and is not intended to constitute financial, investment, or other professional advice. The opinions expressed are those of the hosts and guests and do not necessarily reflect the views of any affiliated organizations. Investing in financial markets involves risk, including the potential loss of principal. Past performance is not indicative of future results. Before making any investment decisions, you should consult with a qualified financial advisor who can assess your individual financial situation, objectives, and risk tolerance.