The CEO of one of the nation's largest planning firms is doing some estate planning of his own.
Giant LPL Financial says its CEO Mark Casady intends to transfer LPL stock worth about $14 million, to an irrevocable trust "in connection with his financial and estate planning." The company reported the expected transfer of 300,000 shares in an SEC filing; at the market close on Friday, LPL shares were worth $46.73 apiece.
An LPL spokeswoman declined to elaborate beyond the statement.
"There could be innumerable reasons why," says planner and estate attorney Mitchell Eichen of the MDE Group in Morristown, N.J., who is also an expert on stock options but was not familiar with the particulars of the case.
One reason could simply be bullishness on the company's prospects. "Let's say he thinks the stock is going to double, triple or quadruple in value," Eichen explains. "If he doesn't need the money, it's kind of a no-brainer to take it and get it out of the estate."
Putting the shares into an irrevocable trust would save him from having to pay any taxes on appreciation above their current value, he continues: "All subsequent appreciation will be outside of his estate."
Alternately, Casady, who was 53 in February and is married with four children, could simply be preparing for his children's inheritance. Moving shares to a trust might let Casady take partial advantage of the current $5.34 million lifetime federal estate tax exclusion, Eichen says.
Transferring the shares into a trust that Casady does not control also could protect them from creditors, according to Eichen.
However, Casady's ultimate plans for the trust would depend entirely on how it was written, he adds. "You are limited to your imagination as to what you could do with that trust," Eichen says.
The day before LPL disclosed his intention to transfer shares, on Aug. 7, Casady held 309,857 shares of LPL common stock directly, 100,000 shares of common stock indirectly, and vested and unvested options for the purchase of 839,327 shares of common stock, according to the SEC filing.
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