NEWS Archives - Page 7 of 13 - Centura Wealth Advisory

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Cut Your Tax Bill: How to Navigate the Cap on SALT Deductions

The Tax Cuts and Jobs Act of 2017 brought significant changes to the US tax code, including a cap on state and local tax (SALT) deductions. This cap, also known as the SALT deduction limitation, has left many taxpayers looking for ways to reduce their tax bills.

So, how can SALT reduce your tax bill this year?

What is the SALT Deduction Cap?

The SALT deduction cap refers to the limitation on the amount of state and local taxes that can be deducted from federal income tax. Prior to the 2017 Tax Cuts and Jobs Act, taxpayers could deduct the full amount of their state and local income, sales, and property taxes from their federal tax bill. However, the new law introduced a $10,000 cap on these deductions, a significant impact for taxpayers in states with high taxes.

Taxpayers are now paying more in federal income tax than they ever did before. Understanding the SALT deduction cap and how it works can help taxpayers navigate their tax bills more effectively.

Talk To An Expert

Strategies for Navigating the SALT Deduction Cap:

Navigating the cap on SALT deductions requires careful planning and consideration of your financial situation. Here are five strategies to help you cut your tax bill:

Bundling Deductions:

Increase your itemized deductions by bundling expenses together. This means you can make multiple years worth of charitable donations in a single year, prepay your property taxes for the upcoming year, or bundle other deductible expenses in the same tax year. This can help you exceed the SALT deduction cap and maximize your tax savings.

Utilizing Charitable Donations:

Charitable donations reduce your tax liability while supporting a good cause. Consider donating appreciated assets such as stocks, mutual funds, or real estate. This avoids capital gains taxes and increases your itemized deductions.

To learn more about charitable gifting strategies, check out our blog, here.

Paying State and Local Taxes Early:

If you owe state or local taxes in the upcoming year, consider paying them early. By prepaying, you can increase your SALT deduction for the current tax year.

Contributing to Retirement Accounts:

Lower your tax bill by contributing to a retirement account such as a 401(k) or IRA. These contributions are tax-deductible and can help reduce your taxable income.

Taking Advantage of Business Deductions:

For business owners, there are several deductions that can reduce tax liability. Some examples include deducting expenses related to your home office, business travel, or equipment purchases.

There are also more specific deductions available to business owners:

Section 199A Deduction

Business owners can deduct up to 20% of their qualified business income, which can result in savings of tens or even hundreds of thousands of dollars. Working with a firm that specializes in tax planning ensures that business owners are aware of all available tax planning opportunities. Tax planning firms also provide project management services to help keep track of necessary tasks and deadlines.

Qualified Business Income (QBI) Deduction

A Qualified Business Income (QBI) deduction allows partners of certain types of businesses, including partnerships, S corporations, and sole proprietorships, to deduct up to 20% of their qualified business income on their personal tax returns.

For instance, if the business generates $4 million in profit and an individual holds a 25% ownership stake, they may have a qualified net income of $1 million.

It is important to note that the mandatory tax rate subscribed to by the business entity is 9.3%, and the business entity is responsible for paying taxes on behalf of the partners, who must individually opt-in to accept this treatment.

The entity also has to pay a tax of $93,000 for one partner, which is deductible at the entity level. The the partner can use this tax to reduce their total income. If an individual is in a 37% bracket, they could potentially save close to $34,000 through this method.

The QBI deduction is subject to income limits. Married couples with joint income above $329,800 or individuals making above $164,900.. Additionally, the deduction may be limited or reduced based on the type of business, the amount of W-2 wages paid by the business, and the value of the business’s assets.

AB 150 Small Business Relief Act

The AB 150 Small Business Relief Act in California is another strategy that businesses can use to navigate the SALT deduction cap. By making a voluntary tax payment at the entity level, businesses can receive a credit on their personal tax returns.. This strategy is particularly beneficial for partnerships, S corps, and LLCs that generate significant profits.

However, there are strict timelines and requirements for participation in the program, including making an irrevocable election by June 15th of the tax year and a minimum payment of $1,000 or 50% of last year’s tax liability (whichever is greater).

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.

April 3, 2023

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NEWS, TAX PLANNING

2023 Tax Updates and Deadlines You Need to Know

Tracking tax deadlines is essential to healthy financial management. A missed deadline can result in penalties, interest charges, or even legal action. To avoid these consequences, you need to be aware of the deadlines for the upcoming tax year.

Let’s take a look at every deadline you need to know in 2023, including due dates for filing returns, making payments, and requesting extensions. By staying informed and organized, you will stay ahead of the curve and ensure a stress-free tax season.

Key Takeaways

Individual income tax returns and extensions are due April 18th, 2023. Some people affected by natural disasters including those in California, Georgia, and Alabama have been given an extension to October 16, 2023 for filing both Federal and State tax returns as well as estimated tax
Independent contractors, gig workers, and self-employed people usually have to make quarterly estimated tax payments at pre-set dates throughout the year.
Partnerships (including multi-member LLCs) and S-Corps filing deadlines are typically either March 15 unless they operate on a fiscal year. A six-month extension to September 15 (or five months after the original deadline) can be requested.

When Are 2022 Taxes Due?

For most individuals who are calendar year filers, tax returns and extensions, will be due on April 18th instead of April 15. This is due to April 15th falling on a weekend and a Washington D.C. holiday (Emancipation Day) which will be observed on April 17th.

Important Updates for Taxpayers in California

California has extended the tax filing and payment deadlines to October 16, 2023 for residents affected by the winter storms in December and January. This move, which is in line with the Biden Administration’s decision to extend various due dates until the same date, comes in addition to the tax relief measures announced by Governor Gavin Newsom in January.

“As communities across the state continue recovering from the damage caused by the winter storms, California is working swiftly to help recovering Californians get back on their feet,” said Governor Newsom. “The state is aligning with the Biden Administration and extending the tax filing deadline in addition to the tax relief announced earlier this year.”

The following counties are eligible for this extended tax relief, per the IRS announcements here and here:

Residents and businesses in Alameda, Alpine, Amador, Butte, Calaveras, Colusa, Contra Costa, Del Norte, El Dorado, Fresno, Glenn, Humboldt, Inyo, Kings, Lake, Los Angeles, Madera, Marin, Mariposa, Mendocino, Merced, Mono, Monterey, Napa, Nevada, Orange, Placer, Riverside, Sacramento, San Benito, San Bernardino, San Diego, San Francisco, San Joaquin, San Luis Obispo, San Mateo, Santa Barbara, Santa Clara, Santa Cruz, Siskiyou, Solano, Sonoma, Stanislaus, Sutter, Tehama, Trinity, Tulare, Tuolumne, Ventura, Yolo, and Yuba counties who have been affected by severe winter storms, flooding, landslides, and mudslides are eligible for tax relief.

Important Tax Deadlines and Dates

Individual Filers

For individual filers, such as employees, retirees, self-employed individuals, independent contractors, and gig workers, it’s crucial to keep track of important tax deadlines and dates. Failing to meet these deadlines could result in penalties and interest charges, so it’s essential to stay informed and stay on top of your tax obligations.

January 16, 2023 – Final quarter 2022 estimated tax payment due for self-employed individuals or those without tax withholding.

January 23, 2023 – IRS begins accepting and processing 2022 federal tax returns.

January 31, 2023 – Deadline for employers to send W-2 forms. The IRS requires employers to send these forms no later than January 31 following the end of the tax year to ensure timely completion of tax returns.

January 31, 2023 – Deadline for sending certain 1099 forms, including 1099-NEC, 1099-MISC, and 1099-K, used to report non-employee income sources such as interest, dividends, or payments for independent contracting.

February 15, 2023 – Re-file Form W-4 by this date if you claimed exemption from employer tax withholding in the previous year and anticipate having no tax liability in the current year.

April 3, 2023 – Deadline for taking 2022 required minimum distribution (RMD) from retirement account if you turned 72 in 2022.

April 18, 2023 – Tax day . Deadline for filing individual income tax returns and filing extensions (Form 4868). Any taxes owed must still be paid by April 18, 2023.

April 18, 2023 – Last day to make IRA and HSA contributions for 2022 tax year.

April 18, 2023 – First quarter 2023 estimated tax payment due. Use IRS Form 1040-ES to calculate estimated tax liability and IRS Publication 505 for detailed rules and information.

June 15, 2023 – Second quarter 2023 estimated tax payment due.

September 15, 2023 – Third quarter 2023 estimated tax payment due.

October 16, 2023 – Deadline for filing individual extended 2022 tax returns.

December 31, 2023 – Deadline for taking 2023 RMD for individuals age 73 or older, after taking the first RMD by April 1, 2023 if you turned 72 in 2022.

January 15, 2024 – Final quarter 2023 estimated tax payment due. Option to pay 100% of previous year’s tax or 90% of current year’s estimated tax liability.

Businesses

If you own a business, there are important tax deadlines and dates you should be aware of to avoid penalties and interest charges. This includes partnerships (including LLCs), C Corporations (Form 1120), and S Corporations (Form 1120S).

January 16, 2023 – 4th Quarter 2022 estimated tax payment due

January 23, 2023 – 2022 Tax season begins

January 31, 2023 – Employers send W-2s forms to employees

January 31, 2023 – Send certain 1099 forms

March 15, 2023 – Taxes are due for some business types (partnerships, multi-member LLCs, and S-Corporations). Businesses organized as partnerships, including multi-member LLCs, and S-Corporations need to file Form 1065, or 1120S by March 15, 2023, if they are a calendar year business. If your business uses a fiscal year, you need to file your tax return by the 15th day of the third month following the close of your tax year. For example, if your business uses an April 1 – March 31 tax year, your business tax return would be due June 15 instead of March 15.

April 18, 2023 – Taxes for C-Corporations are due. Businesses organized as C-Corporations need to file form 1120 by April 18, 2023, if they are a calendar year business. If your business uses a fiscal year, you need to file your tax return by the 15th day of the third month following the close of your tax year. For example, if your business uses an April 1 – March 31 tax year, your business tax return would be due June 15 instead of in April.

September 15, 2023 – Deadline for extended partnership and S-corporation returns

October 16, 2023 – Deadline for extended C-corporation returns

January 15, 2024 – Fourth quarter 2023 estimated tax payment due

The above doesn’t cover every tax deadline, merely the most important ones broadly relevant to these groups of taxpayers. For a comprehensive view of all the important tax deadlines applicable to each taxpayer, please visit IRS Publication 509.

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.

March 31, 2023

Thoughtful Black Businessman in a Tailored Suit Using Laptop while Standing in Office Near Window on Big City. Successful Corporate Top Manager Doing Data Analysis for e-Commerce Startup

NEWS, TAX PLANNING

Section 1202: How Business Owners Can Save Millions of Dollars in Taxes

Section 1202 of the IRS code can potentially save eligible business owners millions of dollars in taxes. However, it is an underutilized section as few business owners know how to successfully implement this strategy.

Section 1202 of the Internal Revenue Code provides an opportunity for business owners to save millions of dollars in taxes by allowing them to exclude a portion of the gain from the sale of qualified small business stock (QSBS).

In this article, we will explore the requirements and benefits of this tax provision, as well as strategies for maximizing the tax savings available under Section 1202. Whether you are a small business owner looking to sell your company or an investor considering buying stock in a small business, understanding the potential tax benefits of Section 1202 can be critical to your financial success.

What is the Section 1202 Exclusion?

The Section 1202 exclusion, also known as the Qualified Small Business Stock (QSBS) tax exemption, is a powerful tool for business owners, investors, employees and others who receive stock in a qualifying company.

This provision in the Internal Revenue Code (IRS) allows individuals to exclude 100% of capital gains from the sale of qualifying stock, up to a maximum of $10 million or 10 times the initial investment, whichever is greater. This can translate to significant tax savings, potentially reaching millions of dollars. For those who qualify, QSBS can be a valuable asset in maximizing financial success.

How Much Can Taxpayers Save with the 1202 Exclusion?

The Section 1202 exclusion, also known as the Qualified Small Business Stock (QSBS) tax exemption, offers a significant opportunity for tax savings on capital gains. By excluding up to $10 million in capital gains, or sometimes more, from taxable income, individuals can potentially save millions of dollars in taxes. For example, at an estimated tax rate of 37%, a $10 million exclusion would result in a savings of $3.7 million. Even if the gains exceed the exclusion threshold, the qualifying amount can still offer significant tax savings.

Who Qualifies for Section 1202 Savings?

To qualify for QSBS treatment, shares must be received directly from a “qualified small business” in exchange for cash or services provided. This applies to both stock sold to early investors and stock given to early employees in exchange for services. A “qualified small business” is defined as a C-corporation engaged in an active trade or business with less than $50 million in gross assets at the time of the shares’ issuance.

Understanding the Qualifications of Section 1202

It is important to note that with such significant tax savings come specific qualifications to receive the benefit. Let’s discuss some of these qualifications.

Stock must be acquired directly from a domestic (US) C corporation.

Stock can only be considered Qualified Small Business Stock (QSBS) if it is acquired from a C corporation and sold while the issuer is also a C corporation. Additionally, the corporation must maintain its C corporation status from the date of issuance to the date of sale.

Section 1202’s gain exclusion cannot be claimed by a corporate stockholder.

Stockholders other than C corporations can qualify for the gain exclusion under Section 1202 of the tax code, but foreign stockholders and tax-exempt stockholders may not be eligible.

QSBS must be acquired directly from the corporation for cash, property or services.

Cash consideration for Qualified Small Business Stock (QSBS) can include $0.001 per share of founder stock or $1,000 per share of convertible preferred stock. “Property” such as intellectual property contributed by founders can also be exchanged for QSBS. Stock issued as a grant to an employee or director can qualify as QSBS as long as it is vested or the recipient makes a timely Section 83(b) election. QSBS can also be transferred upon the death of the stockholder or as a gift and retain its status in the hands of the recipient. Tax partnerships can also distribute QSBS to its partners. It is important to keep full documentation of the consideration paid for QSBS.

QSBS must be “stock” for federal income tax purposes.

QSBS can be voting or non-voting common or preferred stock. Non-vested stock can be treated as “stock” if the recipient makes a timely Section 83(b) election. Stock options and warrants are not considered “stock” for federal income tax purposes. SAFE instruments may be considered “stock” but may be challenged by the IRS.

QSBS must be held for more than five years.

It is possible to reinvest the proceeds from the sale of QSBS in replacement of QSBS if sold before a five-year holding period under Section 1045. QSBS can also be exchanged for other QSBS or non-QSBS in a Section 351 nonrecognition exchange or in a Section 368 tax-free reorganization. The holding period for QSBS typically starts on the date of issuance. If stock is unvested under Section 83, the holding period starts when the stock vests or upon issuance if a Section 83(b) election is made.

The IRS does not make the qualification process easy, which is to be expected when significant tax savings are at stake.

Evaluating the Risks

One common mistake made by entrepreneurs is not considering the QSBS exemption until the time of sale, which can result in missing out on potential tax savings. To avoid this, it is important to plan ahead. Another potential issue is that many startups prioritize stimulating initial growth over tax optimization in the long term.

As more companies and business owners understand the potential impact of Section 1202 on a future liquidity event, we may see more pre-liquidity planning and companies organizing and capitalizing with a long-term mindset.

To Learn More, Tune into Our Podcast

In this episode, Roby Kotcamp and Kyle Malmstrom explain what Section 1202 entails, the primary eligibility criteria for QSBS (qualified small business stock) transactions, and the major tax benefits involved in the process.

Roby and Kyle discuss:

Three types of business owners that can benefit most from QSBS transactions
Important dates that affect the extent of your tax exemption
How to minimize your federal and state income tax as well as your estate tax
Why you should plan at least a year in advance for QSBS transactions
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.

March 16, 2023

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, INSURANCE SOLUTIONS, NEWS

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.

March 11, 2023

INVESTING, NEWS, PODCASTS

Ep 71: Inside Centura’s Elite Advisor Collaboration Program

At Centura Wealth Advisory, we believe that collaboration is key to achieving financial success for their clients.

In Episode 71 of our podcast, Live Life Liberated, we discussed our new program, the Elite Advisor Collaboration Program (EACP), which aims to help financial advisors achieve success by collaborating with other top-tier professionals.

Collaborating for Success

EACP Overview

The EACP (Elite Advisor Collaboration Program) is a program designed to help financial advisors find like-minded professionals who are collaborative and committed to achieving success. The program encourages transparency and openness to collaboration.

Benefits of Collaboration

Derek Myron, a 24-year veteran of the financial advisory business, believes that collaborating with other top advisors is the fastest way to grow and learn. Collaboration with estate planning attorneys, CPAs, and other financial advisors can provide better solutions for clients and elevate the quality of service.

Building a Culture of Continuous Improvement

Jonathan Freeman, from Intel Corporation, sees the value in building a real enterprise that is the best in the business in serving clients. By implementing a culture of continuous improvement, he believes that a competitive advantage can be achieved.

Collaborative Opportunities

The EACP offers various ways to collaborate, such as study groups and joint cases. The program is open to financial advisors who are committed to achieving success and providing the best solutions for their clients.

Iron Sharpens Iron

The EACP’s philosophy is that iron sharpens iron. By collaborating with other top-tier professionals, financial advisors can elevate their game and achieve success that would be difficult to achieve alone.

The Five Pillars of Financial Planning

In addition to the EACP, Centura Wealth Advisory has five pillars that we use to achieve their clients’ financial goals.

Pillar 1: Marketing and Business Development

The first pillar is marketing and business development, which involves getting new clients to the table.

Pillar 2: Financial Planning

The second pillar is financial planning, which starts by understanding the client’s current situation and their North Star, which is their future state of where we are headed.

Pillar 3: Investments

The third pillar is investments, which includes liquid and illiquid investments that will help clients achieve their financial goals and maintain their lifestyle.

Pillar 4: Insurance Solutions

The fourth pillar is insurance solutions, which provides tax-efficient vehicles to deliver estate solutions.

Pillar 5: Practice Management

The fifth and final pillar is practice management, which focuses on how to run the team, find and grow people, and run systems and processes efficiently.

Centura Wealth Advisory’s Financial Advisor Program

Centura Wealth Advisory also offers a program for financial advisors to learn more about their pillars and best practices. The program walks the advisors through a brief introduction of the program and the different elements of the pillars. We collaborate with the advisors, who choose one or two pillars that interest them the most and an area where we think we can teach the most. The program aims to build trust by exposing thoughts and solutions.

Building Trust through Collaborative Approaches

Centura Wealth Advisory values collaborative approaches to building trust and achieving financial success. We believe that partnering with other professionals or witnessing and participating in their process can be a great way to learn and build trust. For example, we share how an advisor introduced them to an ultra-high-net-worth client, and we worked side by side through their financial planning process, achieving a great outcome for the client. The advisor also learned about Centura Wealth Advisory’s approach and solutions.

Commitment to Financial Success and Freedom

Centura Wealth Advisory is dedicated to helping clients achieve financial success and freedom. We believe that financial success is not just about accumulating wealth but also about living life liberated. Their team of experienced professionals provides customized solutions to meet each client’s unique needs, whether we are just starting out or are already well-established.

Partnering with Centura Wealth Advisory

If you’re looking for a partner to help you achieve financial success and live life liberated, Centura Wealth Advisory may be the right choice for you. Their team of experienced professionals is committed to providing customized solutions that meet your unique needs and help you achieve your financial goals.

Learning More about Centura Wealth Advisory and Our Services

To learn more about Centura Wealth Advisory, our Elite Advisor Collaboration Program, and five pillars of financial planning, visit our website or listen to their Live Life Liberated podcast. By taking the first step towards financial freedom and partnering with Centura Wealth Advisory, you can start living life liberated today.

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.

March 8, 2023

wealth advisors discuss Pass through Entities

NEWS, PODCASTS, TAX PLANNING

Ep. 70: Everything You Need to Know about Pass-Through Entities

Pass-through entities are a popular business structure for small business owners that allow profits and losses to pass through to the owners’ personal tax returns instead of being taxed at the corporate level.

In Episode 70 of the Live Life Liberated podcast, Chuck Levun, a tax and business attorney with Levun, Goodman and Cohen, shares his expertise on pass-through entities with host Kyle Malmstrom. The podcast covers a range of topics related to pass-through entities, including S corps, LLCs, partnerships, and more. Chuck offers insights into the advantages and disadvantages of each structure and how to choose the right one for your business.

This blog highlights the limitations and drawbacks of S corporations compared to partnerships and LLCs, as discussed by Chuck and Kyle in the podcast, and emphasizes the importance of tax planning for small business owners. Whether you’re just starting out or have been running a successful business for years, there’s always more to learn about how to minimize your tax liability and maximize your profitability.

What Are Pass-Through Entities?

Pass-through entities are designed to “pass through” income, deductions, and tax liabilities to individual owners or partners. Unlike traditional corporations, which are subject to corporate-level taxes, pass-through entities avoid double taxation, simplifying the tax process and often reducing overall tax burdens.

Types of Pass-Through Entities

S Corporations (S Corps): Offer limited liability protection and avoid corporate taxation but come with strict ownership and operational rules.
Limited Liability Companies (LLCs): Combine liability protection with operational flexibility.
Partnerships: Provide flexibility in ownership, management, and tax deductions.

Each structure has its own strengths and limitations, making it critical for business owners to evaluate their unique needs before making a choice.

Comparing Pass-Through Entity Types

S Corporations

S corporations combine limited liability protection with the tax benefits of a pass-through structure. Shareholders report profits and losses on their personal tax returns, avoiding corporate taxes. However, S corporations come with notable limitations:

Ownership Restrictions: S corporations can only have up to 100 shareholders, and shareholders must be U.S. citizens, resident aliens, or certain types of trusts.
Loss Deductions: Loss deductions are limited to the shareholder’s basis, which excludes debt. This restriction can limit the ability to offset losses.
Compliance Requirements: S corporations face stricter rules regarding ownership structure and operational practices.

Partnerships and LLCs

Partnerships and LLCs offer significantly more flexibility in terms of ownership, management, and tax treatment. Key advantages include:

Broad Ownership: These entities allow for a wider range of investors, including individuals, corporations, and foreign entities.
Debt in Basis: Debt is included in the owner’s basis, allowing for greater loss deductions and more flexible debt management.
Adaptable Structure: Partnerships and LLCs are less restricted by regulations, making them ideal for businesses that need to pivot or grow quickly.

For businesses involved in real estate, partnerships and LLCs often provide smoother refinancing options and greater ease in managing cash flow without triggering additional tax liabilities.

Key Considerations for Business Owners

When choosing a pass-through entity, it’s important to consider several factors:

Ownership Flexibility: Partnerships and LLCs allow diverse ownership structures, making it easier to bring in capital or new partners.
Loss Deduction and Debt Management: Partnerships and LLCs provide better options for deducting losses and managing debt compared to S corporations.
Regulatory Simplicity: Partnerships and LLCs are less regulated than S corporations, offering more adaptable frameworks for businesses needing to pivot or scale.

Benefits of Tax Planning and Choosing the Right Entity

Careful tax planning is critical when selecting the right business structure. By evaluating the advantages and disadvantages of each entity type, business owners can minimize their tax liability and maximize profitability. For instance, partnerships and LLCs often allow for more strategic use of debt and losses, while S corporations may provide simplicity for smaller businesses with limited ownership needs.

Avoiding Common Mistakes with Pass-Through Entities

Mistakes in entity selection can lead to unnecessary tax burdens, compliance challenges, or operational inefficiencies. To avoid these pitfalls:

Understand Ownership Rules: If your business plans to bring in outside investors, partnerships or LLCs may be a better fit than S corporations.
Factor in Real Estate Holdings: For businesses holding real estate, partnerships and LLCs are typically more advantageous due to their treatment of debt and refinancing.
Plan for Future Growth: Choose a structure that aligns with your long-term goals, whether that means raising capital, expanding operations, or managing tax obligations effectively.

Why Professional Guidance Matters

The intricacies of pass-through entities require careful consideration, particularly for businesses with complex operations or growth plans. Working with a tax professional or business consultant ensures you fully understand the implications of your chosen structure and can plan effectively for the future. Their expertise can also help you navigate ever-changing tax laws and regulations.

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.

February 22, 2023

NEWS, PODCASTS

Ep. 69:The Importance of Passion and Professional Help in Starting a Business

Starting a business can be both exciting and challenging. Many entrepreneurs start their businesses out of passion, hoping to create something new, solve a problem or fill a gap in the market. However, passion alone is not enough to ensure the success of a business. A range of skills, including effective communication, problem-solving, and financial management, are also essential.

In this blog post, we discuss the importance of passion and professional help in starting a business, with a focus on Tony Chen’s journey from academia to entrepreneurship. We explore how his experience with planning and selling his business highlights the value of seeking professional help, finding passion in work, and taking on new challenges.

Learn From Our Client, Tony Chen: From Academia to Entrepreneurship

Tony, a lifelong entrepreneur and business owner, recently shared his story on the Live Life Liberated podcast. Let’s take a look.

From Psychology to Business: A Lifelong Entrepreneur

Tony’s story began in academia, where his focus was on understanding human behavior and psychology. However, as he progressed through his post-doctoral studies, Tony discovered a desire for a more dynamic and challenging environment. The business world offered precisely that, leading him to transition into entrepreneurship.

For decades, Tony built and managed successful businesses, learning valuable lessons along the way. His entrepreneurial journey was filled with highs and lows, as is often the case, but his passion for problem-solving and innovation kept him motivated.

One key insight Tony shared is the importance of adaptability in business. The ability to embrace change and tackle unforeseen challenges head-on was a cornerstone of his success. For entrepreneurs, this mindset is essential, especially when preparing for significant transitions like selling a business.

Passion in Business: Tony’s Insights

When asked about his transition from academia to business, Tony noted a significant difference between the two:

“In academia, one often repeats the same process and uses the same tools, while in the business world, each day brings new challenges that require different decisions.”

Tony’s story is a testament to the fact that successful entrepreneurs can come from diverse backgrounds and can have a wide range of experiences. His journey shows that it is possible to find success by following one’s passion and taking on new challenges.

Preparing to Exit: The Importance of Early Planning

By 2019, Tony decided it was time to sell his business. Knowing how complex the process would be, he sought guidance from Centura Wealth Advisory to ensure everything went smoothly.

Pre-LOI Planning

Before signing a letter of intent (LOI), Tony and his team focused on evaluating the company’s financial health, identifying potential buyers, and aligning the sale with his personal goals. Early preparation was critical to maximizing the business’s value and ensuring a successful outcome.

Post-LOI Planning

After the LOI was signed, the focus shifted to finalizing the sale. This stage required careful negotiation, tax planning, and a seamless transition for everyone involved. With Centura’s support, Tony was able to navigate these steps effectively.

The Liberated Wealth Process®

Centura’s Liberated Wealth Process played a central role in guiding Tony through the sale and preparing him for life afterward. This approach helped him clarify his goals, understand his options, and feel confident in his decisions.

Tony described the experience as smooth and rewarding, crediting Centura’s expertise for making a complex process manageable.

Building the Right Team

Tony’s story highlights the importance of working with professionals who bring specialized expertise. Selling a business involves complex financial, legal, and tax considerations—areas where having the right team can make all the difference.

Tony’s team included:

Wealth Advisors: To align the sale with his long-term financial goals.
Tax Professionals: To handle the tax implications of the transaction.
Legal Experts: To protect his interests throughout the sale process.

This collaborative approach allowed Tony to focus on what he did best as a business owner, leaving the technical details to his trusted advisors.

Managing Wealth After the Sale

Once the sale was complete, Tony’s focus shifted to managing his wealth. Centura helped him create a strategy to preserve and grow his assets, tailored to his goals and risk tolerance.

Exploring Alternative Investments

Tony also explored alternative investments, such as private equity, real estate, and hedge funds. These non-traditional options helped him diversify his portfolio and work toward achieving higher returns. With Centura’s guidance, he was able to make informed decisions that suited his financial objectives.

Advice for Entrepreneurs

For those considering selling a business, Tony had two key pieces of advice:

Start planning early: Early preparation can uncover opportunities to increase the value of your business and ensure a smoother transition.
Build the right team: Having experts in finance, tax, and legal matters is crucial for navigating the complexities of a sale.

Tony also stressed the importance of structuring the business to meet best practices well in advance. Taking the time to make these adjustments can significantly improve the outcome of a sale.

Key Takeaways

Tony’s journey offers practical lessons for business owners:

Adaptability and a willingness to embrace change are essential.
Passion is a great starting point, but success comes from preparation and strategic thinking.
Professional guidance can help business owners achieve their goals and avoid costly mistakes.

At Centura Wealth Advisory, we’re here to help entrepreneurs navigate major transitions, plan for the future, and take control of their wealth.

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.

February 8, 2023

Business team meeting to conference, collaboration discussing working analyzing with financial data and marketing business strategy project, presentation and brainstorming to making profit of company

NEWS, TAX PLANNING

The SECURE 2.0 Act: What These Changes Mean for Taxpayers

Author: Seth Meisler, CFA, CFP^®, CPA/PFS, MBA, Sr. Wealth Advisor

On December 23, 2022, we received a gift from Congress. A 4,000 page bill called the Consolidated Appropriations Act of 2023. Inside this bill is what is now being called the “SECURE 2.0 Act” (SECURE 2.0). In 2019, the SECURE Act, also known as the Setting Every Community Up for Retirement Enhancement, made significant changes to IRAs and retirement plans.

The largest changes affect those who inherited IRAs or retirement plans. SECURE 2.0 Act offers a number of changes to the existing retirement system, but not as radical as its predecessor. The provisions included in this act, such as raising the age for RMDs and modifying catch-up contribution limits, may appear to be positive at first glance. However, it is important to consider the long-term implications and potential drawbacks of these changes.

In this blog, we will examine the key provisions of the SECURE 2.0 Act and shed light on what these changes could mean for you and your retirement plan.

Significant Changes For Retirement Accounts

Increased Age for Required Minimum Distributions (RMDs)

As of January 1, 2023, the age at which you must begin withdrawing money from your retirement accounts (RMDs) has increased to 73, up from 72. However, if you turned 72 in 2022 or earlier, you will still need to take the RMDs as previously required. In 2033, the RMD age will move to 75.

This may sound like a positive change, but withdrawing money later may not be the most tax efficient option. Due to a combination of rising account values and potential for rising tax rates, taxpayers who delay taking distributions from tax deferred accounts could be subject to pay higher rates in the future than today. It may be more advantageous for individuals to withdraw funds from their IRAs earlier or convert them to Roth accounts, rather than letting these accounts accumulate and potentially facing a substantial tax bill in the future. Careful consideration and planning with your financial advisor will be essential to prevent potentially overpaying taxes and to take advantage of available tax savings opportunities.

Penalty Tax Reduction

The penalties for not taking RMDs will also decrease. Previously, if you failed to take an RMD, you were subject to a 50% penalty on the missed amount. Starting in 2023, the penalty will be reduced to 25% of the missed RMD amount. If you rectify the missed RMD by taking it and filing a corrected tax return promptly, the penalty for IRA accounts will be further reduced to 10%.

Roth Plan Account RMD Elimination

Currently, Roth IRAs are exempt from lifetime RMDs, but Roth Plan accounts (401(k), 403(b), 457(b), etc.) are not. SECURE 2.0 eliminates the RMDs from Roth plan accounts starting in 2024.

Higher Catch-up Contributions

Starting in 2025, SECURE 2.0 increases the catch-up limit for individuals ages 60, 61, 62, or 63 to the greater of $10,000 or 150% of the regular catch-up contribution amount for 2024, adjusted for inflation.

Starting in 2025, Simple IRA participants ages 60, 61, 62, and 63 can also make larger catch up contributions. The catch up amount is the greater of $5,000 or 150% of the regular catch-up contribution amount for 2025, adjusted for inflation.

Currently, catch-up contributions (401(k), 403(b), governmental 457(b), but not SIMPLE IRAs) for those over 50 can be made on either a pre-tax or Roth basis. Starting in 2024, SECURE 2.0 mandates plan participants with earnings over $145,000 (subject to inflation) to make a catch-up contribution to a Roth plan account (if offered by the plan).

Note: If a plan doesn’t offer a Roth option, catch-up contributions are not permitted for any employee (regardless of their wage level).

Starting in 2024, the catch-up contribution limit for IRAs for those aged 50 or older will be adjusted for inflation, meaning it may increase annually based on cost-of-living adjustments. For 2023, the catch up contribution is still $1,000, although the IRA contribution limit has increased to $6,500.

Roth Changes

SIMPLE and SEP IRA Roth Options

Previously, contributions to SIMPLE and SEP IRA had to be made on a pre-tax basis. However, SECURE 2.0 permits the creation of SIMPLE and SEP Roth IRA in 2023. This includes contributions in the employee’s taxable income for the contribution year. It is possible to create a Roth SEP or SIMPLE today, but it will take time for IRA custodians and employers to update their systems, programs, paperwork, and processes to support such contributions.

Employer Contributions as Roth Contributions

SECURE 2.0 permits employer contributions (match or non-elective, but not Profit Sharing) to be allocated towards Roth contributions in a qualified plan, 401(k), 403(b), or governmental 457(b) plan, starting from its implementation. It’s important to note that these amounts must be fully vested and will be included in the employee’s taxable income for the contribution year.

529 Plan to Roth IRA Rollover

Starting in 2024, SECURE 2.0 allows for tax and penalty-free transfer of 529 plan funds to a Roth IRA. However, several conditions must be met to be eligible:

The Roth IRA must be in the name of the 529 plan beneficiary;
The 529 plan must have been in existence for at least 15 years;
The annual transfer limit is the Roth IRA contribution limit for that year ($6,500 in 2023);
The lifetime rollover limit is $35,000;
And contributions to a 529 made within the preceding 5 years (and associated income) cannot be rolled over to a Roth IRA.

In many respects, this is a great idea that is impractical and is likely to be rarely used, based on the current restrictions.

Qualified Charitable Distributions (QCD)

Inflation-indexed QCD Limit

The annual limit for QCD was set at $100,000 when it was first introduced in 2006 as part of the Pension Protection Act. Despite the passage of time, the limit has remained unchanged. However, starting in 2024, the QCD limit will be adjusted for inflation.

Ability to Use QCD for Split-interest Entities

Effective in 2023, individuals can make a one-time QCD of $50,000 to a charitable gift annuity, charitable remainder unitrust, or charitable remainder annuity trust.

Final Thoughts

These are just a few of the many rules that have changed with the introduction of SECURE 2.0 Act. It’s important to note that some changes, although they appear beneficial, may not have the desired outcome depending on your personal financial situation.

These recent rule changes highlight the importance of staying informed and having a comprehensive plan in place. It’s crucial to consider the long-term implications of these changes and how they may impact your finances. It’s advisable to work with a financial advisor to navigate these changes and ensure you’re making the best decisions for your 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.

February 6, 2023

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

ESTATE PLANNING, LIBERATED WEALTH, NEWS, TAX PLANNING

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 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.

December 7, 2022

Businessman talking about investment stock market and graph from computer laptop with broker trader, giving money plan management and analysis. Depicts TradingView financial market chart.

INVESTING, LIBERATED WEALTH, NEWS

How to Elevate Your Advisory: a Guide for Financial Planner and Wealth Advisors

As a financial planner or wealth advisor, you know planning the future of the firm is essential for long-term success.

At Centura Wealth Advisory, we focus our growth across the following five practice area pillars:

Marketing and business development
Financial planning solutions
Life-based estate solutions
Alternative investments
Practice management

In this article, we’ll discuss each of these pillars as well as provide examples of some of our go-to alternative investments.

Marketing and Business Development

How are you leveraging your network of Centers of Influence? Creating opportunities for shared thought leadership through tools like podcasting – such as our Live Life Liberated podcast – or hosting events can prove beneficial through deepening connections, sharing best practices and even increasing referrals.

Financial Planning Solutions

Most financial Advisory firms offer:

Goal based financial planning
Cash flow based financial planning
Needed services after the above is accomplished

How does your firm differentiate your planning offering from the competition? Can you define & articulate your planning process?

Financial advisors can assess their financial planning solutions by asking the following questions about their various process:

Income Tax Planning

What income tax planning strategies do you offer that produce 10-100X+ returns relative to cost?
How do you save your clients 20-80% of their income tax liability?
How are you making clients’ CPAs life easier?
Are you in the driver’s seat of your client’s income tax plan? Or is their CPA?

Wealth Transfer Planning

Are you leading the strategy for your client’s wealth transfer plan? Or is their EPA?

Balance Sheet Optimization

Can you optimize your clients balance sheet to maximize returns, minimize risk and ensure assets are held in optimal account locations for tax purposes?

Investments and Alternative Solutions

At Centura, we understand the power of alternative investments. We look to add exponential value through these alternative investments – such as private equity, private real estate, private credit, hedge funds, cryptocurrency and more.

Chris Osmond, Chief Investment Officer at Centura Wealth Advisory, describes how we approach alternative investments.

https://youtube.com/watch?v=cn8QVK3Dr48%3F%26wmode%3Dopaque%26rel%3D0

Private Credit

Investors may enter private credit investments because of their floating rate loans, which will limit the interest rate risk associated with other forms of investment, such as traditional fixed-income investments.

Additionally, private credit transactions are direct negotiations between the lender and the borrower. This allows investors to access a wide range of private transactions and negotiate terms that best work for their situation.

Life Insurance

Life insurance can be a powerful vehicle for alternative investments. It provides downside protection, high liquidity, and an attractive upside potential relative to investments with a similar risk profile.

Check out episode 31 of our podcast, Live Life Liberated, to learn more about how life insurance solutions can be used as an alternative to fixed-income investments.

Life-Based Estate Solutions

How do you access the best life insurance solution(s) for your clients?

For example, main business lines include:

Cash Management
Income Tax Planning
Wealth Transfer Planning
Business Planning
Death Benefit Planning

Or, advanced Planning concepts, such as:

Split Dollar – Private, Business & GSD
Premium Finance
Charitable Trusts
GRATs, SLATs
IRA Optimization

Check out our retirement checklist, here.

Practice Management

Financial planners and advisors can elevate their advisory through streamlining their systems and processes.

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

In order to assess their current solutions, members of a firm can ask questions such as:

How do you Capitalize on your Financial Genius?
How do you build depth in your organization? What is the level of expertise of your #2?
How do you leverage teams in your practice?
What tech stack solution has unlocked revenue and time in your practice?

Learn more in our blog, The Importance of Systems and Processes in Financial Management.

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.

December 6, 2022