INSIGHTS Archives - Centura Wealth Advisory

FINANCIAL PLANNING, INSIGHTS, NEWS, PODCASTS

Ep. 102: From Planning to Profit: The Centura Wealth Approach

Managing significant wealth comes with complexities that go beyond basic financial planning. For ultra-high-net-worth families—those with a net worth of $20 million or more and annual incomes exceeding $2 million—building a lasting legacy requires a strategic and personalized approach. At Centura Wealth Advisory, Derek Myron and Sean Clark specialize in crafting solutions tailored to the unique needs of business owners, C-suite executives, and other high-net-worth individuals.

In a recent episode of the Live Life Liberated podcast, Derek and Sean shared insights into Centura’s distinctive service model, their approach to investment and tax strategies, and how they help clients optimize their wealth to create long-term financial security.

Tune in below:

Understanding the Unique Needs of Ultra-High-Net-Worth Families

Traditional financial planning isn’t enough for those with complex wealth. Business ownership, real estate investments, and tax-efficient wealth transfer require a deeper level of expertise.

Centura Wealth Advisory takes a holistic approach to financial management, ensuring that every aspect of a client’s financial picture is optimized. Whether planning for the sale of a business, structuring generational wealth transfers, or maximizing tax efficiency, their strategies go beyond cookie-cutter solutions.

“Our service model is designed to help ultra-high-net-worth families not only manage their wealth but also maximize its impact, both for their lifetime and for future generations,” Derek explains.

The Liberated Wealth Planning Process: A 5X Approach

One of the cornerstones of Centura’s strategy is their Liberated Wealth Planning Process, which aims to deliver five times the return on costs by focusing on tax mitigation, balance sheet optimization, and strategic investment planning.

Sean breaks it down:

“We’re not just managing assets. We’re integrating a full-picture approach that includes investment planning, tax strategy, estate structuring, and business transition planning. The goal is to create efficiencies that significantly increase the value we provide.”

This process helps clients retain more of their wealth by minimizing unnecessary taxes and ensuring assets are working as effectively as possible.

Helping Business Owners Plan for Their Next Chapter

Many of Centura’s clients are business owners preparing for a sale or transition. These transitions require more than just financial projections—they need a clear roadmap for maximizing liquidity while minimizing tax burdens.

“We specialize in helping entrepreneurs who are considering selling their companies. Our planning ensures that when they do exit, they’re in the best financial position possible,” Derek says. “That means structuring deals wisely, considering tax implications, and ensuring their wealth is aligned with their long-term goals.”

By addressing everything from estate planning to reinvestment strategies, Centura helps business owners confidently move into the next phase of their financial lives.

Balancing Personalization with Exclusive Investment Access

One of Centura’s key differentiators is what Derek calls the “Goldilocks” approach—being small enough to provide highly personalized service but large enough to offer clients exclusive alternative investment opportunities.

“A lot of firms are either too small to offer meaningful opportunities or too large to provide truly customized strategies,” Sean explains. “We bridge that gap by ensuring our clients get both.”

These alternative investment opportunities can include private equity, real estate, and tax-efficient vehicles that go beyond traditional stock and bond portfolios. The goal is to maximize returns while maintaining a strategy aligned with each client’s risk tolerance and long-term vision.

Transparency and Trust: The Foundation of Client Relationships

At Centura, building long-term relationships based on trust and transparency is a top priority. From the first client meeting through ongoing wealth management, communication and clarity remain central to their process.

“We want clients to know exactly what they’re getting from us at all times,” Derek emphasizes. “That means clear reporting, open discussions about investment strategies, and a process that prioritizes their best interests.”

This commitment to transparency ensures that clients feel confident in their financial strategies and trust that Centura is always acting in their best interests.

Key Takeaways from the Discussion:

Specialized Planning for Business Owners: Centura helps entrepreneurs maximize their wealth before and after selling their businesses.
The Liberated Wealth Process: Designed to provide a 5X return on costs through strategic tax and investment planning.
Exclusive Investment Access: Personalized services paired with alternative investment opportunities.
The “Goldilocks” Firm Philosophy: Large enough to access meaningful opportunities, small enough for personalized attention.
Transparency and Trust: A client-first approach that ensures clarity in planning and execution.

For ultra-high-net-worth individuals looking to optimize their financial strategies, Centura Wealth Advisory offers a unique blend of expertise, personalized service, and exclusive opportunities. By focusing on long-term wealth preservation and tax-efficient planning, they help clients turn financial success into a lasting legacy.

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.

October 24, 2024

INSIGHTS, NEWS, PODCASTS

Ep. 101: The Leadership Approach Driving Centura’s Success

What’s the secret to cultivating a workplace where people are empowered, engaged, and driven to succeed?

At Centura Wealth Advisory, it all starts with a commitment to core values and a leadership approach rooted in trust and open communication.

Krystal Puryear, SHRM-CP, Director of People and Culture, and Nicole Hubbs, Talent Acquisition Specialist, share how Centura has built a thriving culture by focusing on transparency, excellence, integrity, passion, and respect.

From using Radical Candor to foster trust and autonomy to creating opportunities for employee growth and innovation, this conversation provides valuable insights for any business leader or HR professional looking to strengthen their organizational culture.

Tune in below to learn more.

The Role of Core Values in Shaping a Thriving Work Environment

At Centura Wealth Advisory, core values play an essential role in creating an engaging and empowering workplace. Krystal, who oversees all things People and Culture, emphasized how the company’s values shape its workplace dynamic:
“We have a set of core values that really define who we are as an organization. These values are the foundation of everything we do and the way we interact with our team members.”

The core values of Centura include transparency, excellence, integrity, passion, and respect—values that guide their day-to-day operations and contribute to a culture where employees feel supported and encouraged to reach their full potential.

The Power of Radical Candor in Building Trust and Autonomy

A standout aspect of Centura’s leadership approach is the use of Radical Candor. This method, popularized by Kim Scott, emphasizes clear and direct communication, while also showing care and respect for individuals. Krystal and Nicole discussed how Radical Candor helps create a culture of trust and autonomy, where employees feel empowered to share their opinions and take ownership of their work.

Krystal explained,
“Radical Candor allows for open communication between all team members and helps us foster trust. It also gives our employees the autonomy to make decisions and innovate. When they feel trusted, they’re more likely to take ownership and contribute in meaningful ways.”

This trust-building approach encourages employees to take initiative, ask for feedback, and embrace opportunities for growth—ultimately contributing to the company’s success.

Executive Coaching and Leadership Development

One key element of Centura’s success is its investment in leadership development. Both Krystal and Nicole shared how the company emphasizes coaching and mentorship to foster leadership growth within the organization.

Nicole highlighted the value of executive coaching:
“We believe in investing in our leaders. Whether they’re new to a leadership role or have been in the position for a while, we provide executive coaching to help them continue developing their leadership skills.”

This commitment to leadership development is crucial to creating an environment where managers and leaders can inspire their teams and lead with confidence.

Open Communication and Social Events for Team Bonding

Building trust and transparency extends beyond formal leadership training. At Centura, open communication is encouraged at every level of the organization. This commitment to communication is not just about talking—it’s about listening and making space for honest feedback. As Krystal explained,
“We value open and honest communication, and we always try to create opportunities for our employees to have their voices heard.”

In addition to open communication, Centura fosters strong relationships through social events and team-building activities. These events allow employees to connect on a personal level and strengthen bonds within the team. Nicole shared how social events help reinforce trust and create a sense of community:
“We have regular social events and activities that help strengthen relationships within the team. It’s all about creating a sense of belonging and camaraderie, which ultimately drives engagement.”

Hiring for Culture Fit: Aligning Talent with Company Values

One of the most important aspects of Centura’s culture-building approach is identifying and hiring talent that aligns with the company’s core values. Nicole, who plays a key role in talent acquisition, discussed how she ensures that candidates align with Centura’s culture during the hiring process:
“When we hire, we’re not just looking for skills—we’re looking for people who will embody our core values. It’s about finding talent that’s a good fit for the culture, which is critical to maintaining a positive work environment.”

By ensuring that new hires are a strong cultural fit, Centura sets the stage for long-term success and fosters a cohesive, collaborative workforce.

Encouraging Employee Autonomy and Innovation

A key part of Centura’s culture is empowering employees with the autonomy to make decisions and take initiative. By creating an environment where employees are encouraged to think creatively and innovate, Centura fosters a sense of ownership and responsibility.

Krystal shared how the company gives employees the freedom to grow and take risks:
“We encourage autonomy because we believe that when employees have the freedom to make decisions and explore new ideas, it leads to greater innovation and productivity. It also helps them develop a sense of ownership in their work.”

This approach not only leads to higher levels of engagement but also drives innovation within the company, enabling Centura to continuously improve and adapt to changing market conditions.

The Diamond Team Model: Enhancing Collaboration and Career Development

Centura’s Diamond Team model plays a significant role in enhancing collaboration, knowledge sharing, and career development. Krystal explained:
“The Diamond Team model encourages cross-functional collaboration and allows employees to work on diverse projects. It’s a great way for individuals to learn new skills, share knowledge, and grow their careers within the company.”

This model promotes a collaborative environment where employees from different departments can come together, share ideas, and contribute to the company’s success. It also supports career growth by providing employees with opportunities to gain experience in different areas of the business.

Upcoming Team Events and Celebrations

To further strengthen employee engagement and appreciation, Centura regularly organizes team events and celebrations. These events give employees a chance to relax, bond, and celebrate their achievements together. Krystal and Nicole shared some of the upcoming events planned to show appreciation for the team:
“We always look for ways to celebrate our team. Whether it’s a holiday party or a team-building retreat, we want to make sure that everyone feels appreciated and valued.”

These events help reinforce the company’s commitment to creating an engaging and supportive workplace where employees feel recognized for their contributions.

Key Takeaways:

Centura Wealth Advisory’s success is driven by a commitment to core values, a leadership approach rooted in trust, and a focus on employee empowerment. By fostering open communication, encouraging autonomy, and investing in leadership development, Centura has created a culture where employees are engaged, motivated, and passionate about their work. Whether you’re a business leader or an HR professional, the insights shared by Krystal and Nicole provide a roadmap for building a thriving organizational culture that drives success.

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.

October 10, 2024

FINANCIAL PLANNING, INSIGHTS, NEWS, PODCASTS, TAX PLANNING

Ep 100: How a Fractional CFO Can Elevate Your Wealth Strategy

Managing a successful business requires more than just revenue growth—it demands strategic financial oversight, tax optimization, and precise estate planning. If you are not fully capitalizing on your business’s financial strategy, you could be missing out on significant opportunities.

That is why Live Life Liberated is celebrating its 100th episode with a value-packed discussion.

In this episode, host Derek Myron interviews Jonny Borok, a highly experienced fractional CFO, about how these financial experts help business owners achieve investment and estate planning goals with greater precision.

Now, let’s explore what a fractional CFO is, why business owners should consider hiring one, and how they play a critical role in wealth management.

What Is a Fractional CFO?

A fractional CFO is a highly skilled financial executive who works with companies on a part-time or contract basis. Unlike a full-time CFO, who is a permanent employee, fractional CFOs provide strategic financial oversight without the cost of a full-time salary.

They help businesses with:

Financial planning and forecasting
Cash flow management
Tax strategy and reporting
Investment and estate planning
Cross-disciplinary collaboration with wealth managers and tax strategists

For businesses with $5 million or more in revenue, a fractional CFO can bring the expertise needed to optimize financial strategy while freeing up leadership to focus on growth.

Why Business Owners Should Consider a Fractional CFO

Many business owners struggle with financial complexity, whether it is managing cash flow, reducing tax burdens, or planning for long-term wealth preservation.

A fractional CFO provides:

Strategic oversight – Aligns business goals with smart financial planning.
Cross-industry expertise – Brings best practices from various industries.
Tax efficiency – Works with tax strategists to minimize liabilities.
Estate planning insights – Ensures business assets transition smoothly to the next generation.

By working alongside wealth managers, accountants, and legal experts, a fractional CFO helps ensure that every aspect of your financial life is coordinated.

How Fractional CFOs Support Investment and Estate Planning

Estate planning and investment strategies go hand in hand. Business owners often accumulate substantial assets, but without proper planning, much of that wealth could be lost to taxes, legal fees, and inefficient structuring.

Here is how a fractional CFO can help:

1. Optimizing Tax Strategies

Identify tax-saving opportunities through entity structuring.
Implement deductions and deferrals to reduce taxable income.
Work with estate planners to minimize estate and gift taxes.

2. Improving Financial Reporting for Smarter Decisions

Establish reliable financial systems to track assets and liabilities.
Provide transparency for investors, partners, and future heirs.
Ensure accurate reporting for tax compliance and wealth preservation.

3. Enhancing Liquidity and Cash Flow Management

Find ways to unlock capital without disrupting operations.
Manage debt and financing strategies for long-term sustainability.
Ensure cash reserves align with business growth and personal wealth goals.

4. Coordinating with Wealth Managers and Legal Teams

Align investment decisions with estate planning goals.
Structure business ownership for smooth succession planning.
Protect business and personal assets from legal risks.

Who Benefits Most from a Fractional CFO?

This strategy is ideal for:

Business owners who need financial leadership but do not want to hire a full-time CFO.
Entrepreneurs with complex tax and estate planning needs.
Companies preparing for a sale, merger, or transition.
Families looking to structure multi-generational wealth.

Whether you are looking to scale your business, optimize taxes, or safeguard your legacy, a fractional CFO can provide the expertise to make smarter financial decisions.

Final Thoughts: The Power of a Unified Financial Strategy

A fractional CFO is more than just a financial consultant—they are a key partner in your overall wealth strategy. By collaborating with wealth managers, tax strategists, and estate planners, they ensure that every financial decision aligns with your long-term goals.

To explore how a fractional CFO could help elevate your business strategy, tune in to the latest episode of Live Life Liberated.Listen now: Elevate Your Business Strategy: The Strategic Value of a Fractional CFO (Ep. 100)

September 24, 2024

INSIGHTS, NEWS, PODCASTS, TAX PLANNING

Ep 99: Is Your Business Missing Out on Thousands in Tax Savings?

Many small business owners miss out on significant tax savings each year simply because they’re unaware of certain deductions. One of the most overlooked opportunities is the Qualified Business Income (QBI) deduction. This powerful tax break, introduced in the 2017 Tax Cuts and Jobs Act, allows eligible business owners to deduct up to 20% of their qualified business income—but many fail to claim it due to poor planning or lack of proper advisory support.

In a recent episode of Live Life Liberated, hosts Greg Klipstein and Samantha Lawrence break down the QBI deduction, explain why it’s often missed, and discuss how business owners can maximize their tax savings.

Read on to learn more.

What Is the QBI Deduction?

The QBI deduction was created as a response to corporate tax cuts that primarily benefited large businesses. The goal was to ensure small business owners—who employ over 75% of the U.S. workforce—could also receive tax relief.

Eligible business owners can deduct up to 20% of their qualified business income, significantly lowering their taxable income. However, not all businesses qualify, and certain income limitations and restrictions apply.

Who Qualifies?

Sole proprietorships
Partnerships
S corporations
Some real estate investors

Who Doesn’t Qualify?

C corporations
High-income earners in specified service trades (lawyers, doctors, consultants) above income thresholds

Despite its potential, many businesses fail to claim this deduction. Why? Let’s explore the most common reasons.

Why Do Business Owners Miss the QBI Deduction?

Many small business owners either don’t know about the deduction or assume it doesn’t apply to them. Here are the biggest reasons why it’s often overlooked:

1. Incorrect Business Structure

One of the main reasons businesses miss out on the QBI deduction is because their entity type doesn’t qualify. C corporations, for example, are not eligible. Some S corporations may also miss out if they don’t allocate income correctly between salaries and distributions.

2. Poor Tax Planning

Many business owners focus only on year-end tax preparation rather than proactive tax planning throughout the year. Without a strategy, they may exceed income limits that phase out the deduction.

3. Lack of Proper Advisory Support

If your accountant or tax advisor isn’t actively looking for ways to minimize your tax burden, you could be losing money. Some advisory teams don’t fully understand how to structure businesses to maximize deductions like QBI.

4. Failure to Amend Past Tax Returns

Did you miss the deduction in prior years? You may still have time to correct it. Businesses can amend previous tax returns and claim unclaimed deductions, putting real money back in their pockets.

How to Ensure You Maximize Your QBI Deduction

To take full advantage of the QBI deduction, business owners need a proactive approach. Here’s how you can ensure you’re getting the most out of this tax break:

1. Work with a Knowledgeable Tax Advisor

A tax professional who specializes in small business taxation can help identify whether you qualify and how to structure your income to maximize the deduction.

2. Review Your Business Structure

If your current structure isn’t allowing you to claim the deduction, it may be time to restructure your business entity. Switching from a C corporation to an S corporation or partnership might make sense.

3. Monitor Income Levels

Since the QBI deduction phases out at higher income levels, keeping taxable income below the threshold is key. Tax-efficient strategies, such as retirement contributions or reinvesting in the business, can help manage taxable income.

4. Correct Missed Deductions

If you didn’t claim the QBI deduction in previous years, it may not be too late. Talk to your tax professional about amending past returns to recover lost savings.

5. Consider the Bigger Picture

Missing the QBI deduction could be a sign that you’re also missing other tax-saving opportunities, such as retirement plan contributions, business expense deductions, and depreciation benefits. A holistic tax strategy is essential.

Should You Reevaluate Your Advisory Team?

If your current CPA or financial advisor hasn’t discussed the QBI deduction with you, it might be time to find a better advisory team. Many business owners don’t realize they’re overpaying in taxes simply because their advisory team isn’t proactive enough.

A strong tax and financial team should:

Regularly review tax-saving opportunities with you
Help you structure your business for maximum deductions
Advise you on income thresholds and tax-efficient strategies
Ensure you don’t leave money on the table

Take Action Today

The complexity of tax laws often leads to missed opportunities, but the QBI deduction is too valuable to ignore. Don’t let poor planning or lack of advisory support cost you thousands in unnecessary taxes.

To learn more about optimizing your tax strategy, tune in to Live Life Liberated with Centura Wealth Advisory. Listen to the full episode here.

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.

Connect with our team today to learn how we can help you navigate complex financial decisions and secure your financial future with confidence.

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.

September 5, 2024

Business Presentation. Smiling Businessman Giving Speech During Seminar With Coworkers In Office, Standing At Desk In Boardroom, Diverse People Sitting At Table And Listening To Speaker

INSIGHTS, NEWS

Centura’s Company Culture: Hear From Our Team

At Centura, we’re proud of our team and company culture. Why?

Everyone on our team has their own North Star. They center around serving our clients, our community, and their aspirations.

Wondering what our team has to say about Centura? We’ve already asked. Read on to learn more about us, what we do, and what our culture is like here at Centura Wealth Advisory.

Why Centura Wealth Advisory?

Chris Osmond, Chief Investment Officer at Centura Wealth Advisory, describes what makes Centura different from our competition.

Watch the video below or read on to learn more.

There are many reasons why advisors choose to join a new firm.

Chris remarks, “Of course, economics plays a role in their decision. You need to be able to care for your family, retire someday, etc. But, there are also a few other factors that lead advisors to join a new firm.”

One of the major factors Chris Osmond describes is “the opportunity cost of spending two-thirds of your time doing the administrative work that no one wants to do or worry about software contracts that need to be negotiated. The operational and logistic tasks take away from actually producing and spending time doing what you do best.

The business development area is where advisors typically shine; bringing in new clients, adding value, and enriching clients’ lives. At Centura, we provide infrastructure to help alleviate the cumbersome administrative tasks for our advisors, so they can do what they do best.”

What is Your Favorite Part of Centura’s Company Culture?

Click the link or read on to hear about Samantha’s favorite part of Centura’s company culture.

According to Samantha Lawrence, Associate Advisor, her favorite part about company culture are the Fridays. Why? Samantha explains:

“While at Centura, we do plan large events for the whole company, the routine Fridays are what make Centura great. Fridays are fun at Centura. We aim to make our employees excited to come to work and excited for their weekend. And we want Centura to be a place where our employees are excited to be here on a Friday afternoon.”

What is the Company Culture like at Centura?

Zoe Singh, Associate Advisor, describes the company culture at Centura. Click the link to learn more.

We take pride in the culture we’re creating here at Centura Wealth Advisory. Zoe describes the culture as “like a family in a way, we want to be close to everybody…I get questions about how I’m doing at work, but also how I’m doing in my personal life.”

“Working here for five years, I’ve seen a family-like environment, where everyone cares about each other. Managers care about their employees, and the whole team is really focused on the experience of new people coming in.”

At Centura, we want to make every new member of our team feel welcome. It’s important to us to have a positive work culture. After all, you’re spending so much of your day with the people you work with.

Final Thoughts

Headquartered in San Diego, California, Centura is passionate about our client’s objectives and owns the fiduciary responsibility of protecting their interests.

We strive to be the best in our chosen lines of business, not the biggest.

Learn more about our team, here.

August 23, 2024

Senior couple, documents and sign contract for life insurance or home mortgage. Discussion, signature and retired elderly man and woman signing legal paperwork for will or loan application together.

INSIGHTS, NEWS

Top Mistakes Wealthy Families Make in Estate Planning

Preserving and transferring wealth across generations is a significant concern for affluent families. The desire to pass down as much of one’s hard-earned assets as possible while minimizing tax burdens is a universal goal. Achieving this goal, however, requires strategic guidance, expert knowledge, and a comprehensive overview of all assets and goals.

In this blog, we’ll explore the key strategies and considerations involved in reducing estate and gift taxes for affluent families.

Understanding the Complexity of Affluent Estates

Affluent families are characterized by their substantial and multifaceted estates. These estates encompass a diverse array of assets, ranging from valuable financial investments and real estate properties to ownership stakes in businesses and more. The complexity of these estates requires a nuanced approach to estate planning that goes beyond the basic considerations.

The Importance of Meticulous Estate Planning

Given the intricate nature of their holdings, affluent families must engage in meticulous estate planning to facilitate a seamless transition of their wealth to the next generation. Estate planning is not just about the distribution of assets; it encompasses a comprehensive strategy to ensure the family’s financial well-being while minimizing potential tax liabilities. This process involves a detailed evaluation of the family’s financial landscape, aspirations, and the desired legacy.

Now let’s take a closer look at mistakes affluent families often make when estate planning and how to prevent these mistakes.

Mistake 1: Procrastinating

One of the most prevalent mistakes among wealthy families is waiting to handle their estate planning. The belief that estate planning is something to be dealt with in the distant future can lead to rushed decisions or even a lack of a comprehensive plan altogether. By delaying the process, families miss out on valuable opportunities to minimize tax liabilities, establish effective wealth transfer strategies, and ensure that their intentions are carried out.

Mistake 2: Failing to Create a Comprehensive Plan

Estate planning is not a one-size-fits-all endeavor. Creating a comprehensive plan involves a meticulous evaluation of an individual’s or family’s financial landscape, goals, and unique assets. Failing to account for all relevant aspects of an estate can result in assets being overlooked or not distributed according to the intended wishes. Each piece of the estate puzzle, from financial investments to real estate holdings and business interests, should be carefully considered.

Mistake 3: Overlooking Tax Implications

Tax implications play a significant role in estate planning, particularly for wealthy families. Failing to understand and account for potential tax liabilities can lead to significant erosion of the estate’s value. Effective estate planning involves using strategies like trusts, gifting, and tax-efficient investment vehicles to minimize the tax burden on heirs and beneficiaries.

Mistake 4: Neglecting Changes in Family Dynamics

Family dynamics are constantly evolving, and failing to account for these changes in an estate plan can lead to disputes, misunderstandings, and unintended outcomes. Marriages, divorces, births, and deaths can all impact the distribution of assets and the intentions of the estate owner. Regularly reviewing and updating the estate plan to reflect these changes is essential to ensuring its relevance and effectiveness.

Mistake 5: Choosing the Wrong Executor or Trustee

The role of an executor or trustee is crucial in executing the wishes outlined in the estate plan. Selecting an executor without considering their financial acumen, interpersonal skills, and alignment with the family’s values can lead to mismanagement and conflicts. Choosing a trustworthy and capable executor who understands the family’s goals is paramount to a successful estate transfer.

Mistake 6: Underestimating the Importance of Communication

Transparent communication is key to avoiding misunderstandings and potential conflicts among family members. Failing to discuss the estate plan with heirs and beneficiaries can lead to surprises and resentment down the line. By openly discussing intentions, addressing concerns, and managing expectations, families can foster understanding and unity during what can be a sensitive process.

Mistake 7: Disregarding the Need for Professional Guidance

Estate planning for wealthy families is a complex and multifaceted task that requires expert knowledge in legal, financial, and tax matters. Relying solely on personal judgment without seeking professional guidance can lead to missed opportunities and costly errors. Collaborating with attorneys, financial advisors, and tax experts ensures that the estate plan is comprehensive, legally sound, and aligned with the family’s goals.

Interested in learning more about estate planning? Tune into our Live Life Liberated podcast here.

Final Notes

As you’ve discovered, estate planning is more than just a financial exercise; it’s a holistic approach to preserving your wealth, values, and legacy for generations to come. By exploring the potential mistakes that can arise and the strategies to avoid them, you’re already taking crucial steps toward securing a lasting legacy.

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.

October 6, 2023

Woman in home office using tablet and mobile phone writing work schedule on notepad, Working from home.

FINANCIAL PLANNING, INSIGHTS, NEWS

ING Trusts and IRS Scrutiny: Risk Vs Benefit

ING trusts, also known as Incomplete Non-Grantor trusts, have gained popularity as a tax planning strategy for high-net-worth individuals. These trusts offer significant benefits, but recent scrutiny from the IRS and state tax authorities has raised concerns about potential risks. In this blog, we will delve into the world of ING trusts, exploring their advantages and drawbacks, and shedding light on the evolving landscape of IRS regulations.

Understanding the risks versus benefits of ING trusts will enable you to make informed decisions about your wealth preservation strategies.

What is an ING Trust?

An ING trust is an irrevocable trust that is designed to be an “incomplete” gift. This allows the settlor to avoid an immediate gift tax implication. Incomplete non-grantor trusts are structured in a way that requires the grantor to retain certain rights or powers over the trust assets. These rights might include the ability to change trustee composition, or the ability to indirectly access trust income. By keeping certain powers, the settlor ensures that the trust is treated as an incomplete gift for gift tax purposes. At the same time, other specific powers need to be given away so that you can achieve non-grantor trust status. In so doing, income is not taxed as part of the settlor’s individual income tax return (usually in their high-tax home state); rather, the income is taxed at the trust level (in a state that does not have a state income tax on trust income). This can result in significant tax savings, especially for high-income earners.

Benefits of ING Trusts

Control over Assets

By utilizing an ING Trust, you can (and actually must) maintain some control over these trust assets. You can guide the originating terms of the trust, such as how the assets are managed and distributed, while still enjoying the income tax benefits associated with transferring ownership to the trust.

Gift Tax Avoidance

One of the objectives of an ING Trust is to avoid triggering gift taxes. By retaining enough control to characterize the gift as incomplete, you will not need to utilize any of your lifetime gift exemption, leaving a larger amount of exemption to be used on other strategies that focus more specifically on gift and estate tax minimization. This can help ensure that more of your hard-earned wealth ultimately goes to your intended beneficiaries rather than to taxes.

Income Tax Reduction

If structured correctly, assets transferred to the trust can be sold without paying the income tax that would otherwise be due in the settlor’s state of residence. In addition, ongoing earnings inside the trust can escape state income taxation. This can materially add to your long-term wealth.

Creditor Protection

Another advantage of an ING Trust is the added layer of protection it provides against creditors. Assets held within the trust are shielded from potential claims, providing an extra level of security for your wealth.

IRS Scrutiny and Risks

While ING trusts offer attractive benefits, they have come under increased scrutiny from the IRS and state tax authorities. The primary concern is that some taxpayers may abuse the incomplete gift status of the trusts to engage in tax avoidance or reduction strategies that may be perceived as aggressive or abusive.

Legislative Proposals and Regulatory Changes

Recent legislative proposals and regulatory changes aim to address these concerns and prevent taxpayers from using ING trusts as a means to avoid legitimate tax liabilities. For instance, California recently passed Senate Bill 131 which requires that net income derived from incomplete non-grantor trusts be subject to California income tax if the trust’s grantor is a California resident. Similar measures may be introduced in other states as well. In circumstances such as these, there are tested methods to work around the new rules – that is beyond the scope of this post.

Caution and Compliance

It is essential to be cautious when structuring an ING trust and ensure that it complies with all applicable tax laws and regulations. Engaging with experienced estate planning attorneys and tax professionals can help navigate the complexities of ING trusts and ensure that your estate planning strategies remain compliant and effective.

Finding the Right Balance: Risk vs. Benefit

When considering an ING trust as part of your tax planning strategy, it is crucial to strike the right balance between risk and benefit. These trusts can be powerful tools for tax planning and asset protection, but they should be approached with care and transparency.

Working with a knowledgeable and experienced team of professionals will help you understand the potential risks associated with ING trusts and design a plan that aligns with your financial goals and priorities. Properly structured and executed ING trusts can offer significant advantages while adhering to legal and ethical standards.

Final Notes

ING trusts can be a valuable addition to your tax planning toolkit, providing income tax efficiency, asset protection, and (indirectly) wealth transfer benefits. However, the increasing IRS scrutiny and potential regulatory changes require careful consideration and adherence to tax laws.

Consulting with experienced professionals will enable you to make well-informed decisions about ING trusts, ensuring that your wealth transfer and tax planning strategies are both effective and compliant. Protecting and preserving your wealth for future generations requires thoughtful planning, and an ING trust can play a pivotal role in achieving your financial objectives.

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.

September 15, 2023

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ESTATE PLANNING, FINANCIAL PLANNING, INSIGHTS, NEWS

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.

August 4, 2023

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FINANCIAL PLANNING, INSIGHTS, NEWS

QPRT Trusts and Gift Tax Efficiency: Transferring Real Estate with Reduced Tax Implications

Transferring real estate to future generations can be a complex process, often accompanied by significant tax implications. However, with careful planning and the right strategy, you can minimize the estate tax burden and efficiently pass on your real estate assets to your loved ones. One effective tool for achieving this goal is the Qualified Personal Residence Trust (QPRT).

In this blog post, we will explore QPRT trusts, their benefits, and how they can help you transfer real estate with reduced tax implications.

Understanding QPRT Trusts

What is a QPRT?

A Qualified Personal Residence Trust (QPRT) is an irrevocable trust that provides a unique opportunity to transfer interest in your primary or secondary residence (i.e. vacation home) to your beneficiaries while still maintaining the right to live in the property for a predetermined period. The trust is established for a fixed term, typically ranging from 10 to 20 years. The QPRT can only own interest in one property, however, that interest can be a fractional interest in the property. An individual can only own 2 QPRTs at a time – primary residence and secondary residence.

Establishing a QPRT:

To set up a QPRT, you create the trust and transfer the ownership of the property into it. As the grantor, you can designate your chosen beneficiaries, who are typically family members, loved ones, or a trust. The trust agreement outlines the specific terms and conditions, including the length of the trust term and the rights and responsibilities of all parties involved.

Retaining the Right to Reside:

During the trust term, you retain the right to live in the property, preserving your ability to enjoy the comforts and memories of your home. This benefit can be especially valuable if you have a strong emotional attachment to your residence.

Transfer of Property:

If you were to pass-away during the trust term, the QPRT is unwound and the asset reverts back into your estate. However, you are no worse than if you never did the QPRT in the first place. If you live through the trust term, then at the end of the trust term, ownership of the interest in the property is automatically transferred to the remainder beneficiaries. This seamless transition ensures that your loved ones receive the property according to your wishes. However, once the trust term expires, you no longer have the right to reside in the property unless a separate agreement is reached with the beneficiaries and you may need to pay rent to continue living or using the residence.

Benefits of QPRT Trusts

Reduced Gift Taxes

By transferring the property to a QPRT, you are effectively making a gift to your beneficiaries. The value of the gift is determined by the fair market value of the property and the length of the trust term. Since you retain the right to live in the property for a specific period, the value of the gift is reduced for gift tax purposes, potentially resulting in significant estate tax savings.

Future Appreciation

One of the key advantages of a QPRT is the ability to transfer the future appreciation of the property to your beneficiaries. As the property appreciates in value over time, that growth occurs outside of your taxable estate. This can provide substantial estate tax savings and ensure that your beneficiaries receive the full benefit of any appreciation.

Continued Use and Control

Even though the property is transferred to the trust, you can still reside in it for the specified trust term. This allows you to continue enjoying your home while making arrangements for its transfer to your beneficiaries. Additionally, you can retain certain control over the property during the trust term, such as the ability to sell or rent it with specific provisions outlined in the trust agreement.

Important Considerations

Trust Term:

The length of the trust term is a crucial factor to consider when establishing a QPRT. The longer the term, the greater the potential gift tax savings. However, the greater the trust term, the greater mortality risk during the trust term. It’s essential to balance this with your own housing needs and goals, ensuring that the trust term aligns with your plans and overall health.

Stepped-Up Basis:

It’s important to note that when real estate is transferred through a QPRT, the beneficiaries receive the property with your original basis. This means that if they sell the property after your passing, they may be subject to capital gains tax on any appreciation that occurred during your ownership. Proper planning and consideration of potential income tax consequences are vital in maximizing the benefits of a QPRT.

Estate Tax Considerations:

While a QPRT can help reduce gift taxes, it does not eliminate estate taxes entirely. The value of the property at the time of transfer, minus the retained interest, remains in your taxable estate. It’s crucial to consult with an experienced estate planning attorney or tax professional to understand the overall impact on your estate tax planning.

Final Notes

A Qualified Personal Residence Trust (QPRT) can be a powerful tool for transferring real estate to your beneficiaries while minimizing gift taxes and maximizing tax efficiency. By utilizing a QPRT, you can reduce the taxable value of the gift and retain the right to reside in the property for a specified period. However, it’s crucial to consider factors such as trust term, stepped-up basis, and estate tax implications when incorporating a QPRT into your estate planning strategy. Seeking guidance from professionals specializing in estate planning and tax laws is highly recommended to ensure that you make informed decisions and optimize the benefits of a QPRT. With careful planning and the expertise of professionals, you can transfer your real estate assets to future generations with reduced tax implications, preserving your wealth and securing a lasting legacy for your loved ones.

If you need further assistance or guidance regarding QPRT trusts and estate planning, feel free to reach out to our team at Centura Wealth Advisory. We specialize in providing comprehensive estate planning solutions and can help you navigate the complexities of transferring real estate with reduced tax implications. Contact us today to schedule a consultation and take the first step towards efficient wealth transfer.

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.

August 3, 2023

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INSIGHTS

ING Trusts: Control Your Assets and Minimize Income and Estate Taxes

When it comes to estate planning, one of the key considerations for many individuals is how to retain control over their assets while minimizing the burden of income and estate taxes. ING Trusts offer a compelling solution that allows you to achieve both objectives.

In this blog post, we will explore the concept of ING Trusts, their benefits, and how they can help you preserve your wealth and secure your legacy.

Understanding ING Trusts

An ING Trust, also known as an Incomplete (Gift) Non-Grantor Trust, is a specialized type of irrevocable trust that offers unique advantages in terms of asset control as well as income and estate tax planning. Unlike traditional grantor trusts, where the grantor retains control over the assets and is responsible for the income taxes, ING Trusts shift both control and income tax responsibility to the trust itself.

Benefits of ING Trusts

Control over Assets:

By utilizing an ING Trust, you can maintain a significant level of control over your assets. You can guide the terms of the trust, such as how the assets are managed and distributed, while still enjoying the income tax benefits associated with transferring ownership to the trust.

Estate Tax Reduction:

One of the primary objectives of an ING Trust is to minimize gift and estate taxes. By removing assets from your taxable estate, while not utilizing any of your lifetime gift exemption, you can potentially reduce the estate tax liability upon your passing. This strategy can help ensure that more of your hard-earned wealth goes to your intended beneficiaries rather than to taxes.

Income Tax Reduction:

If structured correctly, assets transferred to the trust can be sold without paying the income tax that would otherwise be due in the settlor’s state of residence. In addition, ongoing earnings inside the trust can escape state income taxation. This can materially add to your long-term wealth.

Creditor Protection:

Another advantage of an ING Trust is the added layer of protection it provides against creditors. Assets held within the trust are shielded from potential claims, providing an extra level of security for your wealth.

Generation-Skipping Transfer Tax Planning:

ING Trusts can be particularly advantageous for individuals who wish to transfer wealth to future generations while minimizing the impact of the generation-skipping transfer tax. By structuring the trust appropriately, you can establish a lasting legacy for your family, ensuring that your assets are preserved for future heirs.

Before establishing an ING Trust, it is important to carefully consider the following factors:

Important Considerations with ING Trusts

Irrevocability:

One of the fundamental aspects of an ING Trust is its irrevocable nature. Once assets are transferred into the trust, they generally cannot be retrieved. This means that you need to thoroughly plan and ensure that the trust aligns with your long-term objectives. Take the time to evaluate your goals, preferences, and financial circumstances to ensure that an ING Trust is the right fit for your estate planning strategy. Understanding the permanent nature of the trust and its impact on asset control is essential for making informed decisions.

Professional Guidance:

Given the complex nature of estate planning and tax laws, seeking professional guidance is highly advisable when establishing an ING Trust. Consulting with an experienced estate planning attorney or financial advisor who specializes in ING Trusts can provide invaluable assistance throughout the process. These professionals have extensive knowledge of the legal and tax implications associated with such trusts and can offer personalized guidance based on your specific situation. They can help you navigate the intricate rules and regulations, ensuring that the trust is tailored to your unique circumstances. By working with experts, you can gain a comprehensive understanding of the benefits, risks, and alternatives, allowing you to make well-informed decisions that align with your goals.

Funding the Trust:

To fully leverage the benefits of an ING Trust, it is essential to properly fund it. Adequate assets need to be transferred into the trust to maximize tax efficiency and achieve your intended goals. This involves identifying and transferring assets such as business interests (primarily equity interest), investments, or other highly appreciated assetsd into the trust. Working closely with your estate planning attorney or financial advisor is crucial during this stage. They can help you determine which assets are suitable for the trust, considering factors such as asset valuations, potential tax consequences, and any restrictions or limitations associated with specific types of assets. By ensuring proper funding, you can maximize the tax advantages and ensure that your assets are effectively protected and distributed according to your wishes.

Impact of California Senate Bill 131 for CA Taxpayers

The State of California passed Senate Bill 131 (SB131) in July 2023 which was intended to foreclose the benefits of ING trusts to California taxpayers by making ING trusts “grantor” trusts. While this likely will mean that new ING trusts are not established in California, there is good news – for transactions that are already in motion, or for taxpayers that would like similar benefits, we can creatively deploy strategies such as an inter vivos qualified terminable interest property (QTIP) trust to accomplish many of the same objectives. This strategy is also available in states such as New York and Washington where similar restrictions exist or are being considered. While that is beyond the scope of this post, we would be happy to discuss the opportunities with you if you are in any of the “ING restricted” states.

Final Notes

ING Trusts offer a powerful tool for individuals seeking to retain control over their assets while minimizing income and estate taxes. By understanding the benefits and considerations associated with these trusts, you can make informed decisions to preserve your wealth and leave a lasting legacy for future generations. With professional guidance and careful planning, an ING Trust can become a cornerstone of your comprehensive estate plan, providing peace of mind and financial security for you and your loved ones.

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.

July 30, 2023