Insights
Lilac Wealth Blog
Practical thinking on taxes, investing, and building long-term wealth, written for founders and tech professionals.
California Muni Yields Haven't Looked Like This in Years
California residents in the top tax bracket pay a combined rate above 50% on investment income: 37% federal, 13.3% state, plus the 3.8% net investment income tax. That math has always made municipal bonds relevant. What's different now is the yield.
What Happens to Your Options When You Leave
When you leave a company, your stock option agreement typically gives you around 90 days to exercise your vested options, though some plans offer more. After that window closes, they expire. Unvested options are usually forfeited entirely. For early employees sitting on a large spread between their strike price and the current value, that's a high-pressure deadline.
How Private Placement Life Insurance Works for Alternative Investments
PPLI lets you hold alternative investments like hedge funds, private equity, and venture capital inside a life insurance policy. Growth is tax-deferred, and the death benefit passes income-tax-free to beneficiaries. The tradeoff is cost, complexity, and a long time horizon before the tax savings outweigh the drag.
The Home Sale Exclusion Is Still Stuck at 1997 Levels
The median home price in 1997 was around $127,000. That's the year Congress set the Section 121 exclusion at $250,000 for single filers and $500,000 for married couples. Those thresholds have never been adjusted.
The SALT Relief That Doesn't Reach High Earners
The SALT deduction cap quadrupled earlier this year, from $10,000 to $40,000, retroactive to 2025. That sounds like relief. For most high earners, it isn't.
The Tax-Loss Harvesting Rule That Doesn't Apply to Crypto
If you hold stocks and sell at a loss, you can't buy the same position back within 30 days and still claim the deduction. That's the wash sale rule. It's been in the tax code since 1921.
The Equity Compensation Mistake of Ignoring State Tax Sourcing
Relocating before a major equity event can save on state taxes. How much depends on rules that vary by state, by equity type, and by how long you were in each place.
When Your Career and Your Portfolio Move in the Same Direction
Most people think of concentration risk as owning too much of one stock. But for tech executives, the exposure often goes further than the portfolio.
Private Banks Are Competing Hard for HNW Borrowers Right Now
If you have $5M or more in investable assets and you're shopping for a mortgage, a credit line, or both, you're getting quoted differently than you were two years ago. Several private banks and wealth platforms have been competing on lending terms for high-net-worth borrowers, and the offers are worth paying attention to.
How GP Clawback Provisions Actually Work in Practice
Most fund agreements include a clawback provision. The idea: if a GP receives more in carried interest than the fund's final waterfall supports, they owe back the difference. Both sides generally agree it belongs in the agreement.
The 409A Valuation Risk That Late-Stage Employees Bear Personally
Every private company that grants stock options needs a 409A valuation, an independent estimate of what the stock is worth. That number sets the exercise price on your options. As long as the exercise price matches or exceeds the 409A value, everything is straightforward from a tax perspective.
Investment Interest Is Deductible — If You Can Prove Where the Money Went
When you borrow against your portfolio and use the proceeds for investment purposes, the interest you pay may be deductible against your net investment income. It's one of the more valuable and underused deductions available to investors who regularly use leverage.
Pre-IPO Domicile Strategy in a State That's Testing Wealth Taxes
California policymakers have explored several wealth tax proposals in recent years, some targeting net worth above $1 billion, others reaching lower thresholds. None have become law yet, but the conversation is active. Earlier versions have included multi-year residency lookback provisions, and some include apportionment rules that would let California tax a prorated share based on how many years a person lived in the state while their wealth grew.
Double-Trigger RSUs and the Tax Math at IPO
If you've been at a private tech company for several years or more, you may have a large pile of RSUs that have time-vested but haven't actually settled. That's because most private companies use a double-trigger structure: your shares don't convert to real stock (and real income) until the company hits a liquidity event like an IPO or acquisition.
How Umbrella Insurance Works — and What's Changing in California
Umbrella insurance is one of the more straightforward pieces of personal risk management. It sits on top of your homeowners and auto policies and extends your liability coverage beyond those base limits. A guest slips on your pool deck. A car accident results in serious injuries. Your teenager causes property damage. These are the kinds of everyday situations where a liability claim can exceed a standard policy limit — and where the umbrella picks up the difference.
What VC Fund LPs Should Know About Their K-1s
If you're invested in venture capital funds, you've dealt with Schedule K-1s. They're the tax forms that pass-through entities — like the limited partnerships most VC funds are structured as — send to their investors each year.
Charitable Remainder Trusts and Concentrated Stock
If you're sitting on a highly appreciated stock position, a direct sale may not be the only path. For founders and early employees with near-zero basis, the tax cost of selling can be enormous.
What Washington's 9.9% Tax Means for High-Earners
Washington lawmakers are advancing a 9.9% tax on household income above $1 million. The bill has cleared both chambers, and Governor Ferguson has said he plans to sign it. If it becomes law and survives the expected legal challenges, it would take effect January 1, 2028. For high earners in tech who chose Washington partly because it had no income tax, this is a meaningful change worth understanding.
Your Heirs Can't Inherit Crypto They Can't Access
A brokerage account has a beneficiary designation. A house has a deed. Crypto held on an exchange like Coinbase can transfer through estate procedures — a death certificate and paperwork. But crypto you hold yourself doesn't work that way. If the private keys, passwords, or recovery phrases aren't documented and accessible to the right people, those assets are permanently gone.
What You're Actually Holding When You Own a Commodities ETF
If you hold a commodities or metals ETF, it's worth understanding that these funds work differently than a typical stock or bond fund — and those differences affect your returns.
Why a $10M Portfolio Shouldn't Look Like a Bigger Version of a $500K One
For most investors, diversification means spreading risk. As a portfolio grows, it increasingly means managing tax cost — because every rebalance, every gain, every distribution carries a drag that compounds over time. How you hold your investments starts to matter as much as what you hold. The tools to address it exist, but they require a different kind of portfolio construction.
What California's Homeowners Insurance Market Looks Like Right Now
State Farm just settled its California rate case at a 17% increase for homeowners — down from the 30% it originally requested, but still a significant jump. Meanwhile, the FAIR Plan — California's insurer of last resort — is seeking a 36% rate increase after reporting $4 billion in losses from the January 2025 wildfires.
Planning Around Prop 19 When the Rules Might Not Last
Before Prop 19, California parents could pass real estate to their children and the kids kept the parent's property tax basis — unlimited for primary residences, up to $1M of assessed value on other property like vacation homes or rentals.
Why Insiders Use 10b5-1 Plans to Diversify on Autopilot
Selling company stock when you're an insider is more complicated than placing a trade. Between blackout windows, material nonpublic information restrictions, and the optics of large sales, these restrictions can cause executives to delay diversification longer than they otherwise would.
The Exchange Fund Trade-Offs Nobody Leads With
If you're sitting on a large block of appreciated public stock — post-IPO, post-vest, or post-acquisition — you've probably heard the exchange fund pitch: contribute your concentrated stock, get a diversified interest, defer the capital gains. It sounds clean. But a few things tend to get glossed over:
Why the SEC Is Paying More Attention to Private Credit
Over the past few years, private credit has earned its place in a lot of portfolios — and for good reason. Yields that compete with or exceed public fixed income, lower correlation to public markets, and access through structures like interval funds, non-traded BDCs, and tender-offer funds that didn't exist for most individual investors a decade ago.
Pre-IPO Financial Planning: What to Lock In Before the Lockup
Founders and early employees often start thinking about financial planning when the IPO feels real — an S-1 is being drafted, bankers are circling, the internal buzz shifts. By then, several of the most valuable planning moves are already harder to execute or off the table entirely.
How an ILIT Keeps Your Death Benefit Out of Your Taxable Estate
Life insurance death benefits are generally income-tax-free. But they're not necessarily estate-tax-free.
Why Fund Managers Who Co-Invest Pay Less on Early Exits
Section 1061 extended the holding period for long-term capital gains on carried interest from one year to three. But there's an exception baked into the statute that's easy to overlook.
Why Exercising Non-Qualified Stock Options May Cost More Than You Think
Non-qualified stock options don't trigger AMT like ISOs do. But if the spread between your exercise price and the stock's current value gets large, the tax hit can be just as painful.
Don't Let Tax Efficiency Break Your Portfolio Construction
Two portfolios with identical holdings can produce different after-tax results — not because of what they own, but because of where they own it.
When Holding Beats Gifting: The Step-Up Calculation Under $15M
With the federal estate tax exemption permanently set at $15 million per person, the conventional advice to gift assets aggressively may now be working against some families.
Preferred Stock and REITs: Same Tailwind, Different Risk
Preferred stock and REITs are a common pairing in income portfolios. Both tend to benefit from falling rates—but the underlying risk drivers are different, and that distinction matters when you're thinking about what's actually underwriting the yield.
AMT Cover: Why a High W-2 Year Can Be Your ISO Exercise Window
Most ISO planning conversations focus on minimizing the AMT hit. But there's a year-specific opportunity that often gets overlooked: a high W-2 year may be one of the best times to exercise.
Why Founders and Early Employees Use GRATs Before a Liquidity Event
Pre-IPO stock is one of the more compelling planning assets for founders and early employees—and the growth potential that makes it exciting is exactly what makes a Grantor Retained Annuity Trust (GRAT) worth understanding.
What Startup Dilution Really Changes—and What It Doesn't
Ownership percentage is one of the first numbers founders and early employees learn to watch. After each round, it's smaller — and that decline is easy to read as loss, even when the business is growing.
A Clear Plan for How Your Capital Is Managed
As wealth grows, complexity tends to follow. Multiple accounts, concentrated stock, private investments, trusts, liquidity events, and meaningful tax exposure — each layer adds decisions that need to be made thoughtfully.
Insuring Homes the Standard Market Won't Touch
Major insurers have been pulling back from high-risk markets—wildfire corridors, coastal flood zones, aging properties—leaving wealthy homeowners with a coverage gap and few obvious paths forward. What most don't realize is that a parallel insurance market exists specifically for situations like theirs.
Liquidation Preferences and the Gap Between Ownership and Economics
Liquidation preferences come up in nearly every fundraising conversation — but they're easy to set aside when you're focused on building and closing a round. They tend to become more relevant later, often when it matters most.
Beyond the Bottom Line: A Framework for Measuring Investment Success
An investment return is rarely a single, definitive number. A "10% return" can represent a significant achievement or a missed opportunity depending on the context. Truly understanding success requires selecting the appropriate lens.
Seller Financing as a Structural Tool in Real Estate Transactions
We've all seen how quickly the lending landscape can shift. When rates bounce or bank requirements tighten, even the most qualified buyers can get stuck in the traditional mortgage gears.
Same Company, Different QSBS Rules: What the OBBB Changed About Issuance Timing
The One Big Beautiful Bill updated Section 1202 (QSBS) in meaningful ways. While much of the attention has focused on the higher exclusion cap ($15M) and the expanded gross-asset threshold ($75M), issuance timing has become just as important.
Safe Harbor Withholding: How High-Income Households Buy Time When Taxes Spike
Big tax bills rarely build gradually. They usually follow events—liquidity windows, equity compensation, concentrated sales, fund distributions, or a single unusually strong income year.
How Treasury Bills Work — and How Treasury Ladders Are Used in Practice
Treasury bills are one of the most common cash-management tools used by wealthy investors. Before getting into ladders, it helps to understand how a T-bill actually works from an investor's point of view.
Box Spreads as a Tool for Short-Term Liquidity
Short-term liquidity is typically addressed through familiar tools: HELOCs, margin loans, and securities-backed lines of credit. While these solutions offer flexibility, their cost structure and tax treatment often make them less efficient than they initially appear.
How Covered Call Income Fits Into a Coordinated Capital Gains Strategy
Covered calls are a core tool for sophisticated portfolios—not to replace equity exposure, but to increase total return and reshape a position's return profile.
Why Success Often Creates Financial Friction
For people who already have wealth, complexity is rarely accidental. It's usually the result of taking good advice and doing many things right.
How Real Estate Is Passed Down (and Why the Method Matters)
When families talk about passing down a home, it's often framed as a simple question of who gets it. In practice, how the property is transferred can matter just as much—both from an income-tax standpoint and with respect to ongoing property taxes.