Smiling mid adult businesswoman signing agreement document during meeting. Happy mature black business woman signing contract in modern office. African american manager in formal clothing with documents after deal and successful negotiations.
,

Private Fiduciaries and Their Role in Estate Planning

Private fiduciaries can play a critical role in managing and protecting the assets of their clients. They also help ensure that their clients’ wishes are carried out after they are gone and their assets reach their desired beneficiaries.

Estate planning is a crucial process that allows individuals to protect and distribute their assets and ensure their wishes are fulfilled after their passing. Within this realm, private fiduciaries play an essential role. Private fiduciaries, also known as professional trustees or estate administrators, are trusted individuals or organizations appointed to manage and oversee the affairs of an estate. 

In this blog, we will explore the significance of private fiduciaries in estate planning and shed light on their responsibilities and benefits.

What is a Private Fiduciary?

A private fiduciary is a person or entity designated to act on behalf of an individual or their estate in the event of incapacitation, disability, or death. They are responsible for carrying out the wishes outlined in the estate plan and ensuring the smooth administration of the estate. Unlike family members or friends who may lack the necessary expertise, private fiduciaries are trained professionals with a deep understanding of the legal and financial aspects of estate planning.

Key Responsibilities of Private Fiduciaries

Private fiduciaries assume various critical responsibilities throughout the estate planning process. These include:

Asset Management: Private fiduciaries are entrusted with managing and safeguarding the estate’s assets. This involves overseeing investments, handling financial transactions, and ensuring the estate’s value is preserved.

Estate Distribution: Following the instructions outlined in the estate plan, private fiduciaries oversee the distribution of assets to beneficiaries. They ensure that the process is carried out accurately, fairly, and in compliance with legal requirements.

Debt and Tax Obligations: Private fiduciaries handle the settlement of debts, payment of taxes, and filing necessary documentation, relieving the family of these complex and time-consuming tasks.

Legal Compliance: They ensure that the estate administration complies with local laws and regulations, minimizing the risk of legal complications.

Conflict Resolution: Private fiduciaries can mediate and resolve disputes that may arise among beneficiaries, heirs, or family members, promoting harmony during the estate distribution process.

Benefits of Engaging a Private Fiduciary

Expertise and Experience: Private fiduciaries are trained professionals who possess extensive knowledge in estate planning, tax laws, and financial management. Their expertise ensures that the estate is administered efficiently and effectively.

Impartiality: By appointing a private fiduciary, individuals can ensure that the estate’s affairs are handled impartially, avoiding potential conflicts of interest that may arise within the family.

Continuity: Private fiduciaries provide stability and continuity in estate administration. They are available throughout the process and can navigate any unforeseen challenges that may arise.

Privacy and Confidentiality: Private fiduciaries prioritize maintaining privacy and confidentiality, protecting the estate owner’s sensitive information and minimizing the risk of public exposure.

Professional Network: Private fiduciaries often have extensive networks of professionals, including lawyers, accountants, and investment advisors. They can tap into these resources to provide comprehensive support during the estate planning process.

Selecting a Private Fiduciary

When choosing a private fiduciary, it is essential to consider their qualifications, experience, reputation, and fees. Engaging in thorough research, seeking referrals, and conducting interviews will help ensure that the selected private fiduciary aligns with the individual’s goals and values.

The Distinction Between Private Fiduciaries and Trust Banks

Private fiduciaries and trust banks both provide professional services in estate planning and administration, but there are notable differences between the two:

Personalized Attention: Private fiduciaries often offer a more personalized approach, taking the time to understand the unique goals, values, and circumstances of their clients. They typically have fewer clients, allowing for a closer client-fiduciary relationship.

Flexibility: Private fiduciaries can often provide more flexibility in tailoring their services to individual client needs. They are more adaptable to changing circumstances and can offer customized solutions.

Cost: Trust banks generally have a higher fee structure compared to private fiduciaries. Private fiduciaries may offer more cost-effective options, especially for smaller estates or clients with specific needs that do not require the extensive resources of a trust bank.

Expertise: Private fiduciaries bring specialized expertise in estate planning and administration. They often have a comprehensive understanding of tax laws, investment strategies, and legal requirements, enabling them to navigate complex situations effectively.

Client Focus: Private fiduciaries typically work with a select number of clients, allowing them to provide a higher level of attention and personalized service. Trust banks may handle a larger volume of clients, which can result in a more transactional approach.

How Private Fiduciaries and Wealth Advisors (Centura) work together to make UHNW individuals and family’s lives easier:

Private fiduciaries and wealth advisors (such as Centura) work together to make the lives of Ultra-High-Net-Worth (UHNW) individuals and families easier through seamless coordination and specialized expertise. Here’s how they collaborate:

Coordination on Compiling Information for Tax Returns:

Private fiduciaries and wealth advisors collaborate to gather all the necessary financial information required for preparing tax returns accurately. They work together to ensure that complex financial situations, such as multiple sources of income, various investment types, and international assets, are properly accounted for and compliant with tax regulations. By coordinating efforts, they minimize the chances of errors and ensure tax efficiency for their UHNW clients.

Trusted Professional to Complete Trustee Duties:

For UHNW individuals, managing trusts can be highly complex, time-consuming, and require specific legal and financial expertise. A private fiduciary can act as a professional trustee, handling the duties and responsibilities associated with trust administration. By doing so, they relieve the family members or friends of the UHNW individuals from this burden and ensure that the trust is managed impartially and in line with the client’s wishes.

Dealing with Matters for Larger Families Impartially:

Large families with diverse financial interests often face complex decision-making processes. Private fiduciaries and wealth advisors work together to navigate these complexities impartially. They act as neutral third parties, taking into account the interests and objectives of all involved parties, and strive to achieve consensus on important financial decisions. This ensures fair and equitable handling of family matters and preserves family harmony.

Reflecting Trust Terms and Client’s Wishes in Investment Management:

When managing UHNW individuals’ investments, wealth advisors collaborate with private fiduciaries to ensure that the investment strategy aligns with the terms of the trust and the client’s overall wishes. They consider any restrictions or guidelines specified in the trust document and develop an investment approach that meets the client’s financial goals while adhering to the trust’s requirements. By working together, they provide a comprehensive and well-aligned approach to wealth management.

Overall, the partnership between private fiduciaries and wealth advisors streamlines financial management for UHNW individuals and families, providing them with expertise, objectivity, and a coordinated approach to their complex financial affairs.

Interested in Learning More About Private Fiduciaries? Check Out Our Podcast

In this episode, Derek Myron speaks with David Stapleton, President of Stapleton Group, Inc., about private fiduciaries, their role in managing assets and estates, and the benefits they can provide to individuals and families.

Derek and David discuss:

  • Services and benefits offered by private fiduciaries
  • How private fiduciaries differ from trust banks
  • The pros and cons of choosing family members to act as your trustee
  • Real-world examples of what it’s like to work with a private fiduciary
  • And more

Connect With Centura

At Centura Wealth Advisory, we go beyond a traditional multi-family office wealth management firm to offer advanced tax and estate planning solutions which traditional wealth managers often lack in expertise, knowledge, or resources to offer their clients.

We invest heavily into technology and systems to provide our clients with fully transparent reporting and tools to make informed decisions around their wealth plan.

Read on to learn more about our 5-Step Liberated Wealth Process and how Centura can help you liberate your wealth.

Disclosures

Centura Wealth does not make any representations as to the accuracy, timeliness, suitability, or completeness of any information prepared by any unaffiliated third party, whether linked to or incorporated herein.  All such information is provided solely for convenience purposes and all users thereof should be guided accordingly.

We are neither your attorneys nor your accountants and no portion of this material should be interpreted by you as legal, accounting, or tax advice.  We recommend that you seek the advice of a qualified attorney and accountant.

For additional information about Centura, please request our disclosure brochure as set forth on Form ADV using the contact information set forth herein, or refer to the Investment Adviser Public Disclosure website (www.adviserinfo.sec.gov).  Please read the disclosure statement carefully before you engage our firm for advisory services.

Financial advisor consultation with clients on retirement, finance planning or investment and document on laptop screen. Accountant woman, senior people and pension advice, asset management or budget
, ,

Estate Planning 101: What You Need to Know

Estate planning involves the allocation of assets to the next generation. Estate planning is a crucial process that helps individuals to manage and distribute their assets in the event of death or incapacitation. It involves creating legal documents, such as a will and trust, to ensure that your assets are distributed according to your wishes and to minimize taxes and other expenses.

In this article, we will discuss what estate planning is, types of trusts as well as how life insurance can be a key factor of a successful estate plan.

First, What is Estate Planning?

Estate planning is the process of arranging for the management and disposition of your assets in the event of your incapacity or death.  It involves creating legal documents, such as a will and trust, to ensure that your assets are distributed according to your wishes and to minimize taxes and other expenses. 

It can be used as a way to provide for loved ones in the event of your death and can also be incorporated into your overall estate plan. It is important to consult with a qualified attorney and financial advisor to ensure that your estate plan and life insurance needs are properly addressed.

What is an Estate Plan?

An estate plan is a set of documents that outlines your wishes for your assets, healthcare, and guardianship in the event of death or incapacitation. It typically includes a will, designations for guardianship, a healthcare power of attorney, beneficiary designations, a durable power of attorney, a personal letter of intent and possibly a trust.

Let’s take a look at these documents in more detail.

Wills, Trusts, and Beneficiaries

Wills

A will allows you to pass on certain assets, known as probate assets, to your beneficiaries. These assets go through the probate process before being distributed to your heirs. However, some assets are non-probate assets and bypass the will and probate process. These include assets in a trust, life insurance policies, 401k plans, IRAs, pensions, financial assets with a “payable on death” or “transfer on death” designation, and real estate owned jointly with another person.

Trusts

A trust is a legal agreement that allows assets to be managed by a trustee for the benefit of specified beneficiaries. The trustee is responsible for overseeing the trust and distributing assets to the beneficiaries according to the terms of the trust. Unlike probate assets, assets in a trust bypass the probate process and are distributed directly to the beneficiaries.

Revocable Trusts

Revocable trusts, also known as living trusts, allow the grantor (the person creating the trust) to retain control over the assets placed in the trust during their lifetime. The grantor can make changes to the trust, such as adding or removing beneficiaries, or revoking the trust altogether. The assets in a revocable trust are still considered part of the grantor’s estate for estate tax purposes.

Irrevocable Trusts

Irrevocable trusts, on the other hand, cannot be changed or revoked by the grantor once they are established. The grantor gives up control over the assets placed in the trust and they are no longer considered part of their estate for estate tax purposes. This can provide significant tax benefits, as the trust pays its own taxes on any income generated by the assets.

However, the restrictions can be burdensome over time to the heirs and the grantor can’t change the trust’s terms.

It is important to consult with a qualified attorney and financial advisor to ensure that your estate plan and trusts are properly structured to meet your specific needs and goals. They can help you to evaluate the pros and cons of revocable vs irrevocable trusts and determine the best strategy for your estate plan.

How is Life Insurance Used in Estate Planning?

Life insurance can provide a financial safety net for your loved ones by paying out a death benefit to cover end-of-life expenses. Additionally, for individuals with significant assets, it can be used as a tool to help manage estate taxes.

Main Benefits of Life Insurance in Estate Planning

  • Quick financial support to beneficiaries. Life insurance allows your beneficiaries to receive prompt financial assistance upon your passing. After the insured person dies, the designated beneficiary can file a claim with the insurance company and receive the death benefit within a matter of weeks.
  • Easy access to funds to cover financial obligations. A death benefit can provide fast access to funds to cover final expenses and taxes, bypassing the often-lengthy probate process during which a court decides how assets are distributed. This can be especially beneficial when dealing with a large estate.
  • Tax-free inheritance for your family. Beneficiaries are not subject to income tax on the death benefit, unlike with other assets such as traditional retirement accounts.

When used as a part of an estate plan, life insurance policies can be structured in a variety of ways to achieve specific goals, such as providing liquidity to pay estate taxes or creating a trust to manage the proceeds for the benefit of beneficiaries.

It is important to consult with a qualified attorney and financial advisor to ensure that your estate plan and life insurance needs are properly addressed. They can help you to evaluate your overall financial situation and develop a plan that is tailored to your specific needs and goals.

Connect With Centura

At Centura Wealth Advisory, we go beyond a traditional multi-family office wealth management firm to offer advanced tax and estate planning solutions which traditional wealth managers often lack in expertise, knowledge, or resources to offer their clients.

We invest heavily into technology and systems to provide our clients with fully transparent reporting and tools to make informed decisions around their wealth plan.

Read on to learn more about our 5-Step Liberated Wealth Process and how Centura can help you liberate your wealth.

Disclosures

Centura Wealth does not make any representations as to the accuracy, timeliness, suitability, or completeness of any information prepared by any unaffiliated third party, whether linked to or incorporated herein.  All such information is provided solely for convenience purposes and all users thereof should be guided accordingly.

We are neither your attorneys nor your accountants and no portion of this material should be interpreted by you as legal, accounting, or tax advice.  We recommend that you seek the advice of a qualified attorney and accountant.For additional information about Centura, please request our disclosure brochure as set forth on Form ADV using the contact information set forth herein, or refer to the Investment Adviser Public Disclosure website (www.adviserinfo.sec.gov).  Please read the disclosure statement carefully before you engage our firm for advisory services.

close up group of businessman use stylus pen for explaining dashboard about company's profit monthly on tablet and businesswoman holding report paper for collaborate work at meeting event , business finance concept
, , ,

5 Steps to Support Sophisticated Wealth Management

Sophisticated wealth management is a term used to describe financial planning and investment strategies that are tailored to the unique needs and objectives of high net worth individuals. This type of wealth management typically involves a holistic approach that considers the client’s entire financial picture, including their investments, taxes, estate planning, and other financial matters. 

A wealth advisor typically creates a specially tailored investment strategy and plan for their clients to help them manage their assets. This considered, advisors are constantly searching for the ways to streamline and support sophisticated wealth management. At Centura Wealth Advisory, we believe in five steps to support these goals. 

Before we discuss, let’s review what wealth management is.

What Is Wealth Management?

In simple terms, wealth management is a service intended to help wealthy individuals meet a diverse set of needs and financial goals. This service is conducted through a consultative process in which an advisor begins by uncovering a client’s unique facts, assumptions and goals. This information then allows advisors to begin crafting a plan that is specific to each client and their situation. Once clients have evaluated options, and made decisions, maintaining a plan and keeping it on track is how advisors steward clients’ wealth over their lifetime (and beyond). 

At Centura, the wealth management process includes:

  • Uncover – Meticulous discovery process to identify facts, assumptions & goals
  • Unlock – Analyzing & Triangulating to unlock issues and opportunities
  • Design – Developing a multi-purpose action plan to chart new pathways
  • Liberate – Implement planning & portfolio solutions 
  • Steward – Maintaining plan by monitoring and recalibrating as appropriate

This process allows advisors to define the scope of work and related value that can be provided to clients. Some of that value may be financial gain and other value may be found in more qualitative aspects such as peace of mind and fulfillment of life goals.

Why Are Some Clients Underserved in Wealth Management?

Some clients may notice a gap in comprehensive planning and the service they actually receive. 

Financial professionals typically focus on a few key goals for wealthy families and individuals: growing wealth, retaining wealth, transferring wealth, and strategic giving. 

While all of these goals are important, perhaps the most significant challenge in wealth management is tax planning. Why? Once a client accumulates a certain level of wealth, depletion by taxation becomes a major concern. 

However, this phenomenon – and the overall focus on retaining wealth instead of simply building it – is often overlooked by financial advisors. 

That’s why we do things differently at Centura. Let’s take a look at how we close this gap in service. 

How do We Close this Gap in Wealth Management Services?

At Centura, we employ several strategies to close this gap:

  • We take a holistic planning approach
  • We utilize five steps to liberate wealth in a collaborative process

What Does a Holistic Financial Plan Include?

A holistic approach looks at an individual’s lifestyle, goals, values, and priorities to create a financial plan that works for them. Financial planners can coordinate these needs and the lifestyle of their clients in order to create a strategy.

A holistic approach looks at an individual’s lifestyle, goals, values, and priorities to create a financial plan that works for them. Financial planners can coordinate these needs and the lifestyle of their clients in order to create a strategy.

A holistic financial plan may include:

  • Investments (portfolio, brokerage accounts, ETFs, mutual funds, etc.)
  • Retirement planning (finances and lifestyle, cashflow & liquidity)
  • Wealth Transfer planning (Estate Tax, Gift Tax, Generation Skipping Tax)
  • College planning
  • Budgeting and saving
  • Tax allocation (Taxable, Tax Deferred, Tax Free)
  • Risk Management Needs including insurance and asset protection
  • Income tax planning (forward looking)
  • Tax preparation & compliance (rear looking)

5 Steps to Support Sophisticated Wealth Management

As noted earlier, at Centura we have created a comprehensive process that’s specifically designed for ultra-high-net-worth families who have complex financial needs. Our process helps us uncover and solve big and small challenges. Sometimes these are common issues and opportunities for wealthy families, and sometimes they are unique. Our process does not discriminate between uniqueness versus common and therefore is well-adjusted to serve our audience. 

Just as important is our passion for finding and solving complex problems. We flourish in the details and how to find creative, innovative and effective ways to find efficiencies that extend and expand your wealth horizon.

1. Uncover

First, we pursue holistic discovery by gathering and understanding data; the client’s purpose, path, and professional roster. Categorically this allows us to identify relevant facts, assumptions and goals.

2. Unlock

The next phase is to analyze the facts, assumptions and goals to identify issues and opportunities which is done by establishing a baseline plan. We then consider “what if scenarios, and identify a planning scope that can address the unique needs & wants of the client.

3. Design

The design element is a core piece of the Liberated Wealth® process. The design element includes a multi-phase action plan which drives innovative solutions across a span of professionals. At Centura, we serve as the plan architect and coordinate amongst required professionals. As part of this phase, a wealth scorecard is developed and a forward looking approach to the client’s situation is employed. 

4. Liberate

This step involves understanding purposeful deployment. This includes implementation and advancement with plan implementation, coordination of professionals, portfolio implementation, and scorecard reporting.

5. Steward

The final step of the Liberated Wealth® process is to monitor and pivot through purposeful deployment. This includes plan monitoring, timely recalibration, and pivoting based on life events. 

This is a detailed explanation of what a process can look like for a client. It’s important to understand what the short and long-term goals are for your wealth management and understanding your advisor’s process is the first step to achieving that goal. 

All of these steps revolve around the importance of predicting and planning for the future.

Connect With Centura

At Centura Wealth Advisory, we go beyond a traditional multi-family office wealth management firm to offer advanced tax and estate planning solutions which traditional wealth managers often lack in expertise, knowledge, or resources to offer their clients.

We invest heavily into technology and systems to provide our clients with fully transparent reporting and tools to make informed decisions around their wealth plan.

Read on to learn more about our 5-Step Liberated Wealth Process and how Centura can help you liberate your wealth.

Disclosures

Centura Wealth does not make any representations as to the accuracy, timeliness, suitability, or completeness of any information prepared by any unaffiliated third party, whether linked to or incorporated herein.  All such information is provided solely for convenience purposes and all users thereof should be guided accordingly.

We are neither your attorneys nor your accountants and no portion of this material should be interpreted by you as legal, accounting, or tax advice.  We recommend that you seek the advice of a qualified attorney and accountant.

For additional information about Centura, please request our disclosure brochure as set forth on Form ADV using the contact information set forth herein, or refer to the Investment Adviser Public Disclosure website (www.adviserinfo.sec.gov).  Please read the disclosure statement carefully before you engage our firm for advisory services.

Asia stock trader agent or Sale tax loan broker advice brief and point hand to graph report talk to client at office desk show budget chart data or legal result on claim form. Trust will in work plan.
, , ,

Sophisticated Charitable Giving Strategies for Affluent Individuals

Affluent individuals and families may choose to implement charitable giving strategies for the wealth of benefits these strategies provide.

These benefits allow a family to connect with a personal cause or preserve their legacy while contributing to an efficient wealth strategy.

Charitable giving strategies can help affluent families and individuals to realize financial benefits as well as reduce current and estate taxes. These charitable giving strategies can include:

  • Charitable lead annuity trusts (CLATs)
  • Grantor-charitable annuity trusts, and
  • Qualified charitable distributions

Let’s discuss each of these strategies and their benefits in detail.

Make a Qualified Charitable Distribution (QCD)

According to Investopedia, a qualified charitable distribution “allows owners of a traditional IRA to exclude RMDs from their adjusted gross income (AGI) if they give the money to approved charities, also known as qualified charitable organizations.”

In simpler terms, the QCD guideline allows individuals to deduct the amount they donate from their IRA. The QCD counts as part of their annual RMD amount, and they must pay the distribution directly from their IRA to the qualified charity.  

*Distributions must be made directly to an approved charity and are capped at $100,000 annually per person. Please enlist the assistance of a qualified financial or tax advisor to best navigate the process of making a qualified charitable distribution and earn the associated tax benefits.

Benefits of Making a Qualified Charitable Distribution

This charitable giving strategy can effectively reduce an affluent individual’s adjusted gross income while satisfying their required minimum distribution set by the IRS. Further, this strategy can help offset other taxes, such as social security.

Utilize Charitable Lead Annuity Trusts (CLATs)

A charitable lead annuity trust (CLAT) is a charitable trust in which a charity, donor-advised fund, or a foundation that the grantor selects, receives annual payments. These payments may be set for a term of years or the grantor’s lifetime.

At the end of this period, the remaining CLAT assets are distributed amongst the trust’s non-charitable beneficiaries. These beneficiaries are typically the grantor’s descendants or trusts for the descendants’ benefit.

Benefits of Charitable Lead Annuity Trusts (CLATs)

Charitable lead annuity trusts provide a gift tax efficient way for individuals to transfer wealth to heirs while benefiting charities.

However, CLATs are not exempt from income tax. If the grantor wants to claim the immediate income tax charitable deduction, the CLAT must be set up as a grantor trust, or G-CLAT.

Grantor Charitable Lead Annuity Trusts

In a grantor charitable lead annuity trust (G-CLAT), the trust corpus remaining at the end of the term is given back to the donor instead of the donor’s descendants.

G-CLATs provide a host of advantages, which will improve income tax planning, wealth transfer planning, and charitable planning. Let’s take a look at the benefits of this sophisticated charitable giving strategy.

Income Tax Planning

Individuals participating in the G-CLAT will experience the benefits of both immediate and long-term tax benefits once they’ve successfully implemented this charitable giving strategy.

This will result in an immediate income tax dedication for the individual, which is:

  • Subject to 20 to 30% of adjusted gross income (AGI) limitation
  • Able to be utilized over six tax years
  • Ideally consumed at the highest marginal income tax rates

Wealth Transfer Planning

In addition to the immediate benefits of G-CLATs, these trusts also include wealth transfer tax savings. Through these savings, the taxpayer can experience the benefits of a G-CLAT for years.

Charitable Planning

While the taxpayer does not need to have donative intent, charitable planning benefits G-CLATs if the taxpayer decides to participate.

For instance, as a future benefit, G-CLATs provide satisfying charitable annuity payments with appreciated assets, avoiding recognition of gain on these distributions to 501(c)3s.

How to Get Started With These Charitable Giving Strategies

At Centura Wealth Advisory, we know how to optimize charitable giving strategies to best benefit your long-term financial goals. Our team has successfully implemented over 280 CLAT transactions alone.

Read on to learn more about our 5-Step Liberated Wealth Process and how Centura can help you liberate your wealth.

Disclosures

Centura Wealth does not make any representations as to the accuracy, timeliness, suitability, or completeness of any information prepared by any unaffiliated third party, whether linked to or incorporated herein.  All such information is provided solely for convenience purposes and all users thereof should be guided accordingly.

We are neither your attorneys nor your accountants and no portion of this material should be interpreted by you as legal, accounting, or tax advice.  We recommend that you seek the advice of a qualified attorney and accountant.

For additional information about Centura, please request our disclosure brochure as set forth on Form ADV using the contact information set forth herein, or refer to the Investment Adviser Public Disclosure website (www.adviserinfo.sec.gov).  Please read the disclosure statement carefully before you engage our firm for advisory services. 

woman on a computer screen
, , ,

The Importance of Systems and Processes in Financial Management

Financial management is a process by which an individual or an organization organizes and enhances its financial situation through strategies such as:

  • Investment management
  • Retirement planning
  • Tax planning
  • Estate planning
  • And more

Managing your financial portfolio alone can feel overwhelming. At Centura, we act as a financial partner to our clients,  as we steward them toward the strategies that will work best for their unique situations. With that being said, we often use systems and processes to assist in the financial management process. 

What are Financial Management Systems?

A Financial Management System (FMS) is the software and processes an organization uses to manage income, assets, and expenses. The FMS utilizes several functions to simplify financial management, such as maintaining complete audit trails as well as coordinating income statements, expense statements and balance sheets.

Further, a Personal Management System (PFM) performs similar functions to enhance the financial management of an individual or family, such as reducing accounting errors, maintaining audit trails, balancing checks, and automatically paying bills.

Why are Financial Management Systems Important?

Financial management systems and personal management systems are important because they secure long-term financial organization and efficiency. This organization will allow you to make fully informed decisions about your finances without being hindered by disorganized paperwork, accounting errors, or incomplete or inaccurate records. 

What are Financial Management Processes?

Financial management processes are, in their simplest terms, plans and procedures which will help an individual, family or institution reach their financial goals.  These processes can include a series of steps, such as:

  • Identifying financial goals
  • Gathering financial and personal information
  • Analyzing financial information
  • Developing a customized financial plan to achieve these goals

Read on to learn How Centura Supports Goals-Based Investing. 

Why Are Financial Management Processes Important?

You Gain a Better Understanding of Your Portfolio

Processes can build an accurate and complete account of your existing financial situation through the meticulous collection of detailed financial information, identification of existing strategies, as well as the development of an understanding of your financial goals, values and desired outcomes. 

You are in a Better Position to Plan for the Future

Going through a financial plan can unlock your “what-if” scenarios. Consider how your financial plan will change if:

  • You have to take care of your parents or family members
  • You or a member of your family are injured in an accident
  • You decide to become more philanthropic
  • The value of your stock drops
  • Your interest rates increase significantly
  • You decide to move
  • The college tuition for your child(ren) increases

Financial Management Processes Set You Up for Future Success

Regularly creating a financial plan can help you analyze your baseline, goals, existing strategies, and what-if scenarios. Through this analysis, you find what plan would best fit your needs.

At Centura, our advisors aim to understand not only your financial needs but also life events that may impact your finances. We work to create a relationship with you in order to guide you toward the best financial decisions.

It Helps You Keep a Pulse on Your Financial Performance

Implementing financial systems and processes that work for you is an essential aspect of analyzing your financial performance. Performing these processes on a regular basis allows you to make adjustments when necessary and gain a better understanding of your overall performance.  

These regular adjustments ensure your plan is efficient, evolving with market conditions, and continues to align with your financial goals. 

Interested in using financial processes to enhance your financial management but not sure where to start?

We want to help! Learn more about our 5-Step Liberated Wealth Process and how Centura can help you liberate your wealth. 

Centura Wealth does not make any representations as to the accuracy, timeliness, suitability or completeness of any information prepared by any unaffiliated third party, whether linked to or incorporated herein.  All such information is provided solely for convenience purposes and all users thereof should be guided accordingly.

We are neither your attorneys nor your accountants and no portion of this material should be interpreted by you as legal, accounting, or tax advice.  We recommend that you seek the advice of a qualified attorney and accountant.

For additional information about Centura, please request our disclosure brochure as set forth on Form ADV using the contact information set forth herein, or refer to the Investment Adviser Public Disclosure website (www.adviserinfo.sec.gov).  Please read the disclosure statement carefully before you engage our firm for advisory services.

couple by the ocean
, ,

Your Retirement Checklist: Elements to Consider

At Centura Wealth Advisory, stewardship is at the core of everything we do. We believe in partnering with our clients to liberate their wealth management process. Part of our role as stewards is walking our clients through the entire financial planning process, from the present day to the coming years.

One of the main areas we address with our clients is their retirement plans. After a long career, many people dream of retirement. Whether it be spending your free time volunteering, making memories with your grandchildren, or sipping a piña colada on a tropical beach, one thing you don’t want to have to worry about is money.

In order to relieve this stressor, a lot of financial planning and coordination has to occur. Today, we’ve outlined your retirement checklist, and while it is not your one-stop shop for all of your retirement planning (we’d recommend reaching out to a trusted financial advisor for that), it does include the various elements to consider prior to leaving your career.

Your Retirement Expenses: Questions to Consider

There are many questions an individual, along with their trusted financial planner, can review in order to fine-tune the logistics of their retirement. The biggest question when planning for retirement is this: Have you saved enough to ensure you don’t run out of money during retirement?

In order to answer this question, you need to identify how much you can spend annually to ensure your funds will not be drained. Luckily, throughout one’s life, there are a variety of different retirement accounts you can save to trust accounts, 401(k), traditional and Roth IRA accounts, and so on.

Once you retire, certain expenses will be reduced, eliminated, and/or added. To further carve out your budget, ask yourself if:

  • You’ll be expected to financially support any family members
  • You anticipate going on any big family vacations or need a medical procedure
  • You might have any large one-off payments (for example, a wedding or car)
  • Your mortgage will be paid off
  • You will have to pay expenses that are currently being paid by your employer (i.e. medical and/or dental insurance, utilities, automobiles)

Consider all of these elements to help plan your expenses during this time.

Your Retirement Income

The idea of no longer receiving a recurring paycheck can be unsettling; however, research shows that retirement has been around since as early as the 1800s – this considered, we know there are ways to make it work.

Retired individuals typically have some form of retirement income (i.e. pensions, rental income) plus any liquid assets they’ve saved.

Tax Planning

Retirement tax planning, however, is a whole different story. You want to ensure that you can access your assets as tax-efficiently as possible.

Below are some questions to consider when identifying your retirement income.

  • How will you access your liquid assets?
  • When will you claim social security?
  • Do you have any fixed sources of income? (i.e. rental income, pensions, annuities, etc.)
  • Are there opportunities (Roth IRA) for creating tax-free income that you can access down the road?
  • What is the most tax-efficient method to asset your retirement assets?

What Will Your Retirement Look Like?

This is the fun part—deciding how you’d like to spend your time. As previously mentioned, there are many ways to spend your retirement: volunteering, spending time with grandchildren, sipping down piña coladas on a tropical beach, and the list goes on.

Many people, however, fail to recognize just how much time comes with retirement. For most, they gain 40 or more hours a week (when you factor in commuting) to do whatever they please.

Having some sort of structure for the weeks and days can be helpful—especially for those who felt their career was a large part of their identity. Consider the following questions when deciding what your retirement might look like:

  • Do you intend to travel? With family, friends, a partner, or alone? International or local?
  • Do you want to work? On what level? Will you volunteer or work a part-time job?
  • Are you planning to relocate? If so, in or out of state? Out of the country even? It’s important to consider how expenses and taxes in a different location than where you are currently might size up.

A Final Word

There are, of course, various additional factors and considerations when it comes to retirement planning; for example, asset allocation, loss of bonuses, your stock portfolio, and more. This article is just a jumping-off point.

There’s no article that could detail all these elements as precisely as speaking face to face with a trusted financial advisor like those at Centura Wealth Advisory.

Interested in more? Read on to learn how to optimize your retirement plan, then get in touch with our team of stewards today.

shaking hands
, ,

Exit Planning vs Succession Planning vs Legacy Planning: What’s the difference?

The terms succession planning and exit planning are sometimes used interchangeably. At the same time, legacy planning is a part of succession and exit planning strategies but can be addressed on its own for those high-net-worth individuals (HNWIs) who are not also business owners. While succession, legacy, and exit plans require care and attention, there are some important differences. 

Both succession planning and exit planning fall under the umbrella of Business Transition Planning. 

Business Transition Planning is the umbrella term for any strategy focused on creating, maximizing, and preserving the value of a business as it prepares for and experiences transition. 

A successful strategic business transition plan targets three crucial areas of need: 

  1. Maximize the value of the business while the business owner is still in place
  2. Prepare the business owner for the transition from tax strategies to life plans
  3. Optimize the organization structurally and culturally to weather the transition

What Makes Up a Successful Exit Plan? 

Exit planning takes a comprehensive look at the structures, financial, cultural, and legal that make a successful exit possible. It is the strategic process employed when a business is going to be sold or is going to merge with a third party. Because an unknown element will impact the business valuation, its leadership, its culture, and its productivity, the process of setting up a successful exit plan can take between 3- 5 years.

Some of the essential elements of a successful exit plan are: 

  1. Identify the Owner’s Objectives: financial goals, timing details, and people-focused objectives.
  2. Understand the Business’ Value: Intellectual Property (IP), revenue, market conditions, multiples, projections, bubbles, and upcoming industry trends. 
  3. Plan for Leadership Succession: Identifying the key people who will remain with the business through the transition to ensure the business retains its value and incentivize them to weather the transition.
  4. Tax Planning: Implementing tax strategies to reduce the tax burden of a multi-million dollar transaction requires months if not years of planning and implementation of tools from Defined Benefit plans to life insurance tools to philanthropic bequests and more…
  5. Financial and Legal Structuring: Ensuring that the company’s financials accurately reflect the business’ profitability will protect the seller from future exposure to litigation. Simultaneously, it increases the value of the business while legal protection and well-structured contracts with employees, vendors, and clients will help retain the value of the business. 

Who Should Have a Succession Plan? 

Succession Planning is focused primarily on the transfer of leadership and financial control of the business to a family member or key employee. 

When a succession plan is put in place early enough, there is an opportunity for the successor to develop their skills and experience in order to step into the leadership role and make a smooth and successful transition.  For this reason, a successful succession plan can be built into the business from the beginning or, at least be implemented well before discussions begin surrounding the business owner’s transition out of a decision-making role. 

When the succession plan involves an ESOP or the transfer to a key person inside the organization, there are components that need to be addressed:

  • Legal details involving representations & warranties
  • A transitional period during which the owner will remain in an advisory capacity
  • The structure of the acquisition of the company from a financial standpoint 

Generational succession requires identifying issues of control, family structure, rivalries, and the future of the company that should be addressed from a financial and cultural standpoint.  

How Does a Legacy Plan Play into Exit and Succession Planning? 

Legacy planning can also play a part in exit planning and succession planning. While exit and succession planning are both focused on the business owner’s departure from their role as chief decision-maker, legacy planning is focused on the impact of how:

  1. Increased time may have on the owner’s life and 
  2. Increased funds may have on the community around them. 

Integrating elements of legacy planning into an exit or succession plan may involve bequests to philanthropies to both offset taxes and leave a permanent positive impact behind.  It may be as straightforward as the choice to remain on a board in an advisory capacity in a boardroom named for you or as complex as a trust that funds the education or ventures of generations to come. 

For business owners who are HNWIs, the complexities around major money-in-motion events are not to be understated.  With so much on the line, it is essential to get the right advice.  

Trusted wealth advisor relationships, family back offices with lawyers who know your business structures, and reliable advisors to your family as a whole – not just to you the business owner – are important as you start to plan for an exit or succession in your business. Putting a plan in place does not mean that you have to stay on that timeline.  

At Centura Wealth we help set up exit planning, and tax-advantaged strategies for major wealth transfer events and then have the flexibility to pivot when clients’ plans change. Our team focuses on unique strategic plans that are customized to your family’s needs and objectives.  Reach out to learn more about how we help our clients be ready for what’s next. 

For more information on generational wealth and how to transform your strategy to make it last, read our article here. 

Senior couple doing home finances using laptop indoors
,

How to Optimize Your Retirement Plan

At Centura Wealth Advisory one of our core values is stewardship. We believe in partnering with our clients to liberate their wealth management process. 

Part of our role as stewards to our clients is walking them through the entire financial planning process, from present-day to the coming years.  One of the main areas we address with our clients is optimizing their retirement plans.

Listen to the Live Life Liberated Podcast for a detailed perspective from Derek Myron and Kyle Malmstrom, as they discuss how the potential estate tax changes may affect your retirement plan distributions.

One question we often ask our clients is, “Are you ready to overcome the complexities and burdens that come with your success?” Learning how to optimize their retirement plans is one of the foundational steps in overcoming the complexities that come with wealth management. 

The two also share effective strategies to help transfer your accumulated wealth to your desired beneficiaries in a tax-efficient manner. Here are a few of the topics covered in the podcast linked above. 

  • A brief overview of the proposed Build Back Better Act
  • Different ways to take your money out of Individual Retirement Accounts (IRAs)
  • “Live-on” assets versus “leave-on” assets — what is better for you?
  • Reasons to start planning your wealth transfer as early as possible
  • And more

*It should be noted that the information about proposals is subject to change from the time this article is published.

Employee Retirement Income Security Act 

Prior to 1974, employees who worked at one or two companies their entire life would generally be given a pension. A pension is a defined benefit plan.

Some of the factors that would define an employee’s pension plan include: 

  • Years of contribution 
  • How much they made

These factors would determine how much money the employee would receive in the event of retirement, death, or become disabled or unable to work. 

 In 1974, however, the Employee Retirement Income Security Act (ERISA) was introduced. ERISA was the advent of the Individual Retirement Account (IRA). 

The main difference between ERISA and IRA is that ERISA plans are defined benefit plans. The IRA, on the other hand, was a defined contribution plan. This means that the employee can make investments that they control: stocks, bonds, and mutual funds.

Roth IRA

Since then, the rise in popularity of contribution plans has introduced other factors like a Roth IRA, which as far as optimizing your retirement plan, is a great starting point. 

A Roth IRA is a retirement account that grows tax-free and can have tax-free distributions (as long as you hold it for five years and are above the age of 59). 

There are two ways to optimize your retirement plan with a Roth IRA. The two ways are to contribute on an annual basis or to convert Converting your Roth IRA  is taking your existing, non-Roth IRA asset and converting it into a Roth IRA in order to reap the tax benefits.

A Common Challenge

The challenge, however, is getting wealth from a traditional IRA into the Roth IRA. If an individual is in a low-income tax bracket, it’s not a terribly painful process. However, if you’re in a high-income tax bracket, it can present more of a challenge. 

Due to the tax benefits that a Roth IRA provides, a large portion of people used this benefit. Because of this, the government did not predict the substantial amount of money put into these accounts. This brings us to the Build Back Better Plan. 

Build Back Better Plan

The Build Back Better Plan was proposed by Congress in 2021. It aims to place further restrictions regarding Roth IRA contributions on wealthier individuals. 

As stated by CNBC, “Wealthy individuals with more than $10 million in retirement savings would have to draw down their accounts each year, in a new type of required minimum distribution, or RMD. Lawmakers would also close “backdoor Roth” tax loopholes, used largely by the rich, and prohibit further individual retirement account contributions once those accounts exceed $10 million.”

One primary example of the reasoning behind the Build Back Better plan is the Paypal founder, Peter Thiel. Thiel has been able to amass $5 billion in his Roth IRA. Many people are upset and wondering, “How is this fair?”

How the Build Back Better Act Impacts Our Clients

Since 2019, Congress has been looking for loopholes to limit a plan owner’s options for optimization. In this case, “plan owners” include those who have a million dollars or more in their retirement plans and have an estate. Oftentimes, at this level of retirement planning, wealth transfer issues arise.

Plan owners are worried about how to optimize their distributions from their retirement plans because they know that Congress is looking to change the rules. 

What Now?

There are many ways to continue to optimize your retirement plan while you’re alive. 

You Can Make a Distribution

One option is to do a Roth conversion (depending on your facts and circumstances and the timing of income). You could then distribute from the Roth with the tax advantage.  There’s also a way to do an in-kind distribution of different assets out of an IRA that may be tax efficient.

Another option is a qualified charitable distribution. This method eliminates tax liability and the funds are sent to a charity of your choice. 

Set Future Goals

We believe your plan is not a one, two, or three-year plan.

Instead, we focus on a 10 or 15-year plan. The goal is to figure out how you’re intending to manipulate your cash flow and income tax, then to distribute your assets. This could mean distributing them to your spouse or even future generations.

In light of the potential changes coming from Congress, it’s important to start preparing for what’s to come. We encourage you to get in touch with your advisor and figure out a plan of action for your financial future.

As mentioned above, charitable giving is a great wait to improve your bottom-line, while also giving back to the community. Learn more about how charitable giving can improve your bottom line on our blog. 

Centura Wealth does not make any representations as to the accuracy, timeliness, suitability or completeness of any information prepared by any unaffiliated third party, whether linked to or incorporated herein.  All such information is provided solely for convenience purposes and all users thereof should be guided accordingly.

We are neither your attorneys nor your accountants and no portion of this material should be interpreted by you as legal, accounting, or tax advice.  We recommend that you seek the advice of a qualified attorney and accountant.

For additional information about Centura, please request our disclosure brochure as set forth on Form ADV using the contact information set forth herein, or refer to the Investment Adviser Public Disclosure website (www.adviserinfo.sec.gov).   Please read the disclosure statement carefully before you engage our firm for advisory services. 

Aerial view of middle class neighborhood with residential house community and mountain on the background in Rancho Bernardo, South California, USA.
, ,

Estate Tax: What to Expect from Upcoming Changes

Last year, our team posted an article titled, “A Brief History of the Estate Tax and Potential Implications for the Upcoming Election.” A lot has changed since then, and it’s important to reflect on the predictions and outcomes of the estate tax changes that may occur in the next year.

What is the Current Estate Tax? 

Estate Tax is a tax on your right to transfer property at your death. When our first article was written, there were very few taxpayers that encountered the Estate Tax because the exemption level was at an all-time high. 

Currently, the threshold of estate tax exemption is at $11.7 million at a 40% tax rate. This tax only affects the amount above the $11.7 million thresholds. 

The Tax Foundation provides an example of what the future could look like: 

  • “The value of the original asset is $100 million
  • The value of an asset after $1 million step-up in basis repeal exemption
  • The Capital gains taxed at ordinary rates 39.6% + 3.8% NIIT = 43.4%
  • The capital gains tax owed is $42.96 million.
  • So, then the value of remaining assets in the estate are:
  • Biden’s estate tax exemption ($11.7 million)
  • Added to the taxable estate, and estate tax rate (40%)”

Following this example means that with the value of the original asset being $100 million, the total taxes being paid is $61.10 million, with the effective tax rate being 61.1%. 

The Proposed Gift and Estate Tax Exemptions

The current proposal includes a reduction from the current $11.7 million (inflation-adjusted for 2021) threshold to a $5 million (inflation-adjusted) threshold proposed to start on January 1, 2022. The 40% estate and gift tax rate did not change, and the changes will not be retroactive if this proposal goes through. 

What to do before the proposed tax plan goes into effect

There is a short period of time before any tax changes go into effect. As you begin planning for the next year, think about where you may want to adjust your portfolio to account for these potential changes. 

Because the proposed tax plan is not retroactive, any gifts that end before 2021 will not be subject to the updated tax structure. There are also a few things to consider while you plan.

What is a Grantor Trust?

Grantor Trusts are trusts that separate the Grantor and contributor for both estate tax purposes and income tax purposes. The Grantor would be considered the “owner” of the trust for income tax purposes, transactions between trusts, and they are considered “disregarded.” This means that assets sold or exchanged with the trust will not trigger income tax consequences. 

However, this Grantor Trust must be established prior to the new plan going into place in order to be grandfathered into the current tax plan. 

QRPT, GRATs, and CLATs

The use of life insurance trusts, Grantor Retained Annuity Trusts (GRATs), Qualified Personal Residence Trusts (QPRTs), and Charitable Lead Annuity Trusts (CLATs) may also be affected by this updated tax plan. It’s important to ask your wealth advisor what trust options may be affected by the updated tax plan in 2022, in order to take advantage of the current tax plan while you can. 

Will the estate tax changes affect me?

The estate tax of those worth $11.7 million or more (individually or $23.4M jointly) is a federal tax that will affect those taxpayers. Any updates to the federal estate tax will affect all states. 

However, some states also charge a state estate tax. The Tax Foundation reports that the states that have an estate tax in 2021 include: 

  • Oregon
  • Minnesota
  • Illinois
  • Maryland
  • Vermont
  • Connecticut
  • New York
  • Rhode Island
  • Massachusetts
  • Maine
  • Hawaii
  • Washington, D.C. 

As you look to plan for your family’s future be sure to consider the implications of updates to tax plans. Do you have a strong strategy for your family’s future? Get started on your strategy by reading our article, “Generational Wealth: Transform Your Strategy to Make It Last.“

Young family running down rocky mountain trail. Two kids running with parent on a trail in forest.
,

How to Speak with Aging Family Members About Wealth and Inheritance

The Los Angeles Times reported that “about $36 trillion will flow from one generation to another over the next 30 years.” This large amount of inheritance moving from one generation to another means more conversations surrounding money management. While this conversation may feel morbid and uncomfortable, it is essential to making sure your wealth remains after multiple generations. 

How can you make this conversation about financial planning healthy and productive? 

Timing

Environmental and personal factors can heavily influence how a conversation will go. Ideally, you will have prepared them that the conversation about wealth and inheritance is coming.

Bringing up the topic out of the blue may overwhelm your family members.  Slowly starting to mention smaller financial topics while easing into the larger inheritance conversation can be extremely beneficial. Understanding when your family members are prepared to hear this conversation, and really understand the wealth that may be coming their way is essential. 

It may be beneficial to introduce them to your wealth manager, so they can start having conversations with them about how to manage their inheritance. 

Be Direct

Sometimes sugar coating a topic feels like it will help ease what might feel uncomfortable, however, being direct will actually help both you and your family in the long run. It’s important to make sure that you understand exactly what may be coming your way in terms of inheritance. Do they have a property in Wyoming that you don’t know about? It’s important that you don’t have any surprises coming your way during such an emotional time. 

Understanding exactly what is included in your inheritance will also allow them to start planning on ways to continue to grow and build that wealth–– with the help of your family members. This introduction to your inheritance will help guide more conversations surrounding wealth management, investment strategies, and financial planning. 

Succession Planning

For some families, inheritance means passing on a business.

 The element of succession planning that rarely gets addressed is the emotional ties that the founder has to the organization. Letting go of the authority and importance of owning a business can be complicated. 

Some of the key factors of planning for the transfer of power often require adding a third-party coach to the mix. In addition, planning for what the founder will do with their time after the transfer is often complicated. Some of the questions that might come up are: 

  • What role will they have?
  • What influence will they have over decisions? 
  • Who has veto power? 
  • What retirement planning will be implemented for the founder?
  • How will company culture change?  

One option is implementing an incremental transfer of power, meaning there is a plan in place to gradually decrease the founder’s involvement in the company over a period of time. Not only will this allow the founder to still feel connected to the company during the transfer, it will also allow the successor to learn from the founder’s experiences. 

Ask for Advice

With age comes wisdom. It can be helpful to acknowledge that you respect and understand that you can learn from your aging family members. 

Ask for advice on how they’ve managed their wealth and what plans they had in place for their financials in the future. This demonstrates that you want what’s best for their life earnings and family. 

At Centura, we believe one of the key elements of liberating your wealth is planning in a way that unpacks your family’s values and dreams–– following an overall purpose. As you dive into your family’s finances, it’s important to understand what that purpose is, so you can carry on the tradition.

We Can Help!

At Centura, our process caters to your unique needs, therefore is well-adjusted to serve our audience. Just as important is our passion for finding and solving complex problems. Inherited wealth can be complex. Read more about how to understand the complexities that come with inherited wealth in this blog post. 

Centura Wealth does not make any representations as to the accuracy, timeliness, suitability or completeness of any information prepared by any unaffiliated third party, whether linked to or incorporated herein.  All such information is provided solely for convenience purposes and all users thereof should be guided accordingly.

We are neither your attorneys nor your accountants and no portion of this material should be interpreted by you as legal, accounting, or tax advice.  We recommend that you seek the advice of a qualified attorney and accountant.

For additional information about Centura, please request our disclosure brochure as set forth on Form ADV using the contact information set forth herein, or refer to the Investment Adviser Public Disclosure website (www.adviserinfo.sec.gov).   Please read the disclosure statement carefully before you engage our firm for advisory services.

CONNECT WITH US

SAN DIEGO

12255 El Camino Real, Suite 125
San Diego, CA 92130
GET DIRECTIONS
858-771-9500

MURRIETA

25109 Jefferson Ave, Suite 205
Murrieta, CA 92562
GET DIRECTIONS
951-677-3960

Our planning fee pricing for income tax planning services is determined using a standardized matrix based on Net Worth, Income, and Meeting Frequency. This base planning fee price may be adjusted to account for increased complexity or the occurrence of a future income event. To project tax savings, we analyze prior year tax returns to determine their past tax liability to project out the following year’s tax liability. Based on facts collected and confirmed by the client, we then identify and evaluate applicable tax strategies and the estimated annual tax savings they would produce if implemented. The estimated annual tax savings are then divided by the annual engagement price proposed to/agreed to by the client to determine the multiple on estimated annual tax savings generated as it relates to the planning fees paid. Please note, these initial projections are preliminary and based on our current understanding of the client’s situation. Outcomes may vary based on client’s decisions or chosen course of action regarding the implementation of recommended strategies, their specific goals, and risk tolerance.

Legal | Privacy Policy | Careers | Disclosures | Form CRS

© 2025 Centura Wealth Advisory. The Centura Wealth Advisory logo is a trademark.

CCG Wealth Management LLC (“Centura”) is a Registered Investment Adviser. Advisory services are only offered to clients or prospective clients where Centura and its representatives are properly licensed or exempt from licensure. For more information click here