Memo
DM 2026-01
A family selling a business also intended to leave the state. Both were already decided. What had not been decided was which one happened first — and that, not the sale terms, is what the outcome turned on. This is an illustrative sample for a fictional family.
The family owns an operating business they intend to sell, and they intend to move to Texas. Neither intention was in question. The business is worth what it is worth; the buyer will pay what they pay; the family will live where they want to live. Every part of the decision looked settled.
What nobody had put a date on was the sequence. A sale that closes while the family is still an Illinois household is sourced differently from the same sale, at the same price, to the same buyer, closing after Texas domicile has been established and substantiated. Same components, different order, different outcome.
The question before the room was therefore not whether to move or whether to sell. It was whether the move could be established early enough, and defensibly enough, to precede a closing that no one fully controls.
A single question of sequence reaches six of the household's seven systems. It is worth naming them, because each one is a place where the decision could have been made in isolation and quietly cost something elsewhere.
Where the gain is sourced, and in which year it lands. This is the system the decision is usually filed under — and the only one most processes would have looked at.
Entity footprint, the timing a buyer will accept, and what counsel must have in place before a letter of intent hardens.
Two households run in parallel during the transition, and the move's own costs land before any sale proceeds do.
A move rewrites the state layer beneath documents drafted under the old one; titling and trust situs are read against a different statute.
The concentrated sell-down already running on a bracket-aware schedule (DR-003) now shares its bracket years with a sale and a series of conversions.
Schools, proximity to family, and when the move is actually livable — the constraints that decide whether a tax-optimal date is a real one.
Carried unchanged. Named here because a memo that finds every system implicated is not reading carefully.
The path of least friction, and the one the family was already drifting toward, because each step is individually reasonable. Rejected: it is the exact ordering error this sequencing exists to prevent. Once a sale closes against the old domicile, no subsequent move recovers the sourcing.
A genuine option that was seriously considered, because it does real work. Rejected as insufficient rather than wrong: it addresses bracket exposure but not sourcing exposure. It answers a smaller question than the one on the table, and adopting it would have felt like the problem had been handled.
Adopted. It is the only order in which the tax question is decided by facts the family controls — days, intent, documentation — rather than by a closing date set across the table.
Establish Texas residency before sequencing the business sale, not after. Counsel proceeds on the sale in parallel, but no closing is agreed until the residency facts are substantiated rather than merely intended.
The assumptions this rests on are recorded so that a future reader can tell whether the decision aged or the world moved:
The field most processes skip. Without it, review is a re-read; with it, review is an act with a pass/fail condition.
Checked at the most recent Operating Session: no trigger fired. Carried on the risk register under domicile; on the Opportunity Register the matter reads residency clock running, sale sequencing pending.
A decision that only affected itself would not need a memo. This one changed the conditions under which two other decisions are made, which is why it is recorded before them rather than alongside them.
The conversion window exists because of this sequencing — the gap around the move and before the sale closes. If this decision's timeline shifts, the window moves or closes with it, and DR-004 reopens on that trigger rather than on a calendar date.
Deferred by design. A gift made ahead of a firm price risks being unwound or second-guessed once the number is real, so the gifting question waits on the sale this memo sequences. Deferring is a decision, and it is on the record as one.
Already running, and unchanged by this memo — but it now competes for the same bracket years as the sale and the conversions, so its annual sizing is read against them rather than on its own.
Read forward: the Decision Register carries all five entries and how each one reopens.
Most of what this memo records is not the answer. It is the alternatives that were rejected, the assumptions the answer rests on, and the condition that would reopen it — the parts that are ordinarily remembered rather than written, and therefore lost.
Read it in context: the Decision Register carries the entry · the investment-committee memo shows the same form applied to a portfolio decision · the Driftwood Record holds the whole shelf.