Many business owners assume they are five years away from selling their company. The problem? That five-year window often remains constant, year after year. Without proper planning, the timeline for exit can keep getting pushed back until it’s too late to maximize value and ensure a smooth transition.

In a recent episode of the Live Life Liberated podcast, Centura Wealth Advisory’s Zoe Singh sat down with Andrea Steinbrenner, CEO of Exit Consulting Group (ECG), to discuss what it truly takes to prepare for an effective business exit. Listen to the full episode here:

Exit Consulting Group has developed a structured approach to exit readiness that evaluates a business across three core areas:

1. Business Readiness: Can the company operate smoothly without the owner? If the business owner stepped away tomorrow, who would run sales, finance, vendor relationships, and daily operations?
   “Is the business ready to operate without that owner or leader?” – Andrea Steinbrenner
2. Market Readiness: Does the business have market value? What are similar companies selling for? What financing conditions will potential buyers face?
   “We run a valuation on the firm and we say, okay, here’s where we think the fair market value is laying up. Are there buyers out there who will pay this for your company?” – Andrea Steinbrenner
3. Owner Readiness: Is the business owner mentally prepared to transition? What will they do once they step away from their company?
   “A lot of people will tell us, ‘Oh, we’ll go golfing, we’ll go fishing.’ Well, I guarantee there’s only so many days you can do that before you need to do something else.” – Andrea Steinbrenner

Understanding the Exit Timeline and Sales Process

Selling a business is not an overnight decision—it requires strategic planning and execution. Andrea outlined the key steps in the process:

• Business Valuation & Market Research: Determining a fair market price based on industry trends and financial performance.
• Confidential Information Memorandum (CIM): Creating a detailed marketing document to attract potential buyers.
• Buyer Vetting & Indications of Interest (IOIs): Screening potential buyers and negotiating initial terms.
• Letter of Intent (LOI): Once a preferred buyer is identified, an LOI is signed to enter an exclusive negotiation period.
• Due Diligence: The buyer reviews financial records, legal agreements, and operational details.
• Final Negotiations & Closing: Legal documents are finalized, funds are transferred, and ownership transitions.

“Most companies get a minimum of a hundred NDAs, but you can get hundreds of them. From there, we collect what’s called IOIs—Indications of Interest—so we can begin narrowing down the right buyer.” – Andrea Steinbrenner

Internal vs. External Business Sales

Business owners often sell to either an external buyer (such as a private equity firm or strategic buyer) or an internal buyer (such as a family member, key employee, or business partner). Each approach has distinct challenges and benefits.

For internal transitions, emotions and expectations must be carefully managed. Employees or family members may not fully grasp the complexities of ownership.

“First, we have to bring them up to speed… These are now people who have access to information that before they didn’t.” – Andrea Steinbrenner

Meanwhile, external sales involve finding the right buyer, structuring the deal properly, and optimizing the tax implications of the sale.

The Role of Tax Planning in Business Exits

Centura Wealth Advisory emphasizes that the best time to start tax planning is before signing an LOI. According to Zoe Singh, business owners fall into three categories:

• Gold Period: Before signing an LOI—this is when the most tax strategies are available.
• Silver Period: After signing an LOI but before December 31 of the tax year—some strategies are still possible.
• Bronze Period: After the tax year of sale—minimal tax strategies remain, and most tax liabilities are locked in.

“The best time to start tax planning is two to three years before an exit. That gives business owners the flexibility to optimize their tax strategy and ensure their wealth is preserved.” – Zoe Singh

The Bottom Line: Start Preparing Early

Business exits are complex, but the earlier you start preparing, the smoother the transition will be. Whether you’re planning to sell in one year or five, taking proactive steps today can maximize your business’s value and secure your financial future.

For business owners considering an exit, working with experienced professionals—like Centura Wealth Advisory for tax planning and Exit Consulting Group for transaction guidance—can make all the difference.

“The worst outcome is splitting up partnerships and families. Our goal is to find a path that everybody can agree with.” – Andrea Steinbrenner

Connect with Zoe Singh:

• LinkedIn: Zoe Singh

Connect with Andrea Steinbrenner:

• LinkedIn: Andrea Steinbrenner
• Exit Consulting Group

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.

Navigating State Taxes on Capital Gains

For high-net-worth individuals, founder-led business owners, and C-level executives, managing capital gains taxes is a crucial component of wealth preservation. In this episode of Live Life Liberated, Centura Wealth Advisory’s Managing Director, Derek Myron, speaks with Adam Buchwalter, Partner at Wilson Elser, about the intricacies of state-level capital gains taxes and strategies to mitigate them. Listen to the full episode here:

The Challenge: High State Capital Gains Taxes

Some states, like California, New York, and New Jersey, impose significant capital gains taxes—reaching up to 14.4% in California. Meanwhile, there are eight states with zero capital gains tax, including Alaska, Florida, Nevada, South Dakota, Texas, and Wyoming.

“For state tax to be imposed, there has to be nexus to the state. That’s where tax planning becomes an opportunity.” — Adam Buchwalter

So how can individuals in high-tax states legally reduce or eliminate their capital gains taxes? Adam and Derek dive into key strategies.

Strategy 1: Setting Up a Non-Grantor Trust

One of the most effective ways to mitigate state capital gains taxes is by setting up a non-grantor trust in a tax-friendly jurisdiction.

• A non-grantor trust is its own tax-paying entity, domiciled in a state with no capital gains tax.
• The trust, rather than the individual, sells the asset, eliminating state-level taxation.
• Popular states for these trusts include Nevada, South Dakota, and Delaware.

“Conceptually, if a trust is set up in Nevada and sells the asset, there simply should be no state income tax.” — Adam Buchwalter

Strategy 2: ING Trusts—And Why They No Longer Work in Some States

Incomplete Non-Grantor (ING) Trusts, including NINGs (Nevada) and DINGs (Delaware), were once a go-to strategy. However, in 2014, New York eliminated ING trust benefits by taxing them as grantor trusts. In 2023, California followed suit with SB 131, making them ineffective for California residents.

“Governor Newsom decided to follow New York’s lead, and as of 2023, California residents can no longer use INGs to avoid state capital gains taxes.” — Adam Buchwalter

For individuals already holding assets in ING trusts in these states, options include:

• Converting the trust into a completed gift non-grantor trust.
• Using the assets to fund private placement life insurance (PPLI).
• Relocating to a tax-friendly state before liquidation.

Strategy 3: The QTIP Trust Approach

For married couples, a Qualified Terminable Interest Property (QTIP) Trust presents another viable option. This structure allows one spouse to transfer assets into a trust that benefits the other spouse, effectively shielding capital gains from state taxation.

• The trust must be structured as a non-grantor trust.
• Capital gains allocated to principal remain untaxed at the state level.
• The income generated must be distributed to the spouse, subject to state tax.

“With a QTIP trust, the capital gains portion stays in the trust and remains state tax-free, while income is distributed to the spouse.” — Adam Buchwalter

Key Considerations for Capital Gains Planning

While these strategies offer significant tax-saving potential, they require careful execution.

• Trustee Selection Matters: The trustee must reside in a tax-friendly state.
• Legal & Compliance Risks: Taxing authorities may challenge aggressive tax planning.
• Opinion Letters for Protection: A legal tax opinion can help defend against state audits and eliminate penalties in case of disputes.

“Having an opinion letter from a top law firm can provide protection against penalties in the event of an audit.” — Derek Myron

Final Thoughts: Act Before the Exit

The best tax planning happens before a liquidity event. Business owners planning a sale or individuals with highly appreciated assets should explore options early.

“Anyone with a business, a stock portfolio, or other highly appreciated assets in high-tax states should consider these strategies before their exit.” — Adam Buchwalter

Contact Information

• Adam Buchwalter – Partner, Wilson Elser
  📞 (973) 735-5784 | ✉️ adam.buchwalter@wilsonelser.com
• Derek Myron – Managing Director, Centura Wealth Advisory
  ✉️ dmyron@centurawealth.com
• Centura Wealth Advisory
  📞 (858) 771-9500 | 🌐 Centura Wealth Advisory

DISCLAIMER

The information covered and posted represents the views and opinions of the guest and does not necessarily represent the views or opinions of Centura Wealth Advisory. The content has been made available for informational and educational purposes only and is not intended to be a substitute for professional investing advice. Always seek the advice of your financial advisor or other qualified financial service provider with any questions regarding your investment planning.

Centura Wealth Advisory (Centura) is an SEC-registered Investment Advisor with its principal place of business in San Diego, California. Centura and its representatives comply with current registration and notice filing requirements imposed on SEC-registered investment advisors in states where Centura maintains clients. Centura may only transact business in states where it is notice filed or qualifies for an exemption or exclusion from notice filing requirements. Past performance is no guarantee of future results. Tax relief varies based on clients’ circumstances, and all clients do not achieve the same results.

How Can High-Income Business Owners Supercharge Their Retirement Savings?

Business owners with significant surplus cash flow often seek ways to maximize their retirement savings while minimizing tax burdens. Traditional retirement plans like 401(k)s and SEP IRAs offer tax deferral, but they come with contribution limits that may not fully utilize the financial potential of high-income earners.

However, there is a solution: Defined Benefit Plans designed specifically for high-earning business owners. In this episode of the Live Life Liberated podcast, Centura Wealth Advisory’s Sean Clark, Wealth Advisor, and Christopher Hyman, Director of Insurance Solutions, discuss how these plans work, their benefits, and key considerations for implementation.

What Are Defined Benefit Plans?

Defined Benefit Plans differ from Defined Contribution Plans (such as 401(k)s) in that they establish a set benefit to be received in the future, rather than limiting contributions based on annual IRS limits. This allows for significantly larger contributions—potentially millions of dollars per year—providing a powerful tax deferral strategy for business owners.

Key Benefits of Defined Benefit Plans

• Higher Contribution Limits – Unlike a 401(k) or SEP IRA, Defined Benefit Plans allow business owners to set aside significantly more pre-tax income for retirement.
• Tax Efficiency – Contributions reduce taxable income in the current year, providing immediate tax relief while deferring income taxation until retirement.
• Customization – Plans can be tailored to suit the needs of business owners and select employees.
• Life Insurance Integration – Incorporating life insurance into the plan structure can enhance tax advantages and provide additional security.

Who Benefits Most from Defined Benefit Plans?

These plans are best suited for:

• Business owners with annual incomes exceeding $2 million.
• Companies with a small, select group of highly compensated employees.
• Business owners looking to maximize retirement contributions before an upcoming business sale.
• Individuals interested in deferring large sums of income for tax planning purposes.

How Does the Process Work?

1. Plan Design & Setup

The process begins with an actuarial analysis to determine contribution limits based on business financials and employee census data. The plan is then structured to maximize benefits for the owner and selected employees.

2. Maintenance & Ongoing Contributions

Each year, contributions must align with the plan’s funding range, ensuring compliance while optimizing tax benefits. Investment strategies are designed to manage risk and align with plan liabilities.

3. Plan Termination & Rollout

When a business is sold or the owner transitions to retirement, the plan is rolled out to individual IRAs, allowing continued tax-deferred growth. If structured correctly, the plan can avoid excise taxes on overfunding and provide additional financial flexibility.

Why Consider Life Insurance in a Defined Benefit Plan?

• Increases Contribution Limits – The IRS permits higher contributions when life insurance is part of the plan.
• Provides a Discounted Payout – The policy can often be distributed at a fraction of its actual value, creating additional tax efficiencies.
• Offers an Additional Retirement Asset – Policies can be converted into tax-free income sources upon distribution.

Final Thoughts

For high-income business owners, a Defined Benefit Plan offers an opportunity to significantly increase retirement savings, optimize tax planning, and enhance long-term financial security. However, these plans require careful structuring and ongoing management to ensure compliance and maximize benefits.

If you’re a business owner with surplus cash flow and looking for ways to supercharge your retirement savings, reach out to Centura Wealth Advisory to explore how a Defined Benefit Plan might work for you.

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Disclaimer

The information covered in this blog represents the views and opinions of the speakers and does not necessarily reflect the views of Centura Wealth Advisory. This content is for informational and educational purposes only and is not intended as financial, tax, or investment advice. Always consult with a qualified financial professional before making any investment decisions.

In 2017, the Tax Cuts and Jobs Act (TCJA) introduced major changes to income and estate tax laws, offering tax cuts and adjustments that have shaped financial planning for high-net-worth individuals and business owners. However, these provisions are set to expire on December 31, 2025, which could result in higher tax rates and reduced exemptions.

In this episode of Live Life Liberated, Matt Griffith, CFP®, and Roby Kotcamp, CFP®, discuss what these changes mean and how individuals and businesses can prepare for the transition

Key Takeaways on the TCJA Sunset

1. What Happens When the TCJA Expires?

The expiration of the TCJA means a return to pre-2017 tax laws, leading to higher tax rates and reduced deductions for many taxpayers. Congress has the power to modify or extend certain provisions, but as of now, the law is set to sunset automatically.

“The reality is, if we want to continue spending at the current level, we will need to raise revenue. Higher tax rates are almost inevitable.” – Roby Kotcamp

2. Income Tax Rate Increases

If the TCJA expires as planned, most income tax brackets will increase by an average of 9.4%, affecting high earners the most. Notably:

• The top income tax bracket will rise from 37% to 39.6%
• The 22% bracket will jump to 25%, and the 24% bracket will increase to 28%
• The qualified business income (QBI) deduction—a crucial benefit for pass-through entities—will be eliminated

“High-income earners could see an 8-9% increase in their tax bill. If you’re already paying $2 million in taxes, that’s not small change.” – Matt Griffith

3. Estate and Gift Tax Exemptions Will Be Cut in Half

For those with significant wealth, one of the most impactful changes will be the reduction of the estate and gift tax exemption.

• In 2024, the exemption is approximately $27 million for married couples
• After the sunset, it will drop to around $13.5 million for couples and $6.75 million for individuals
• The estate tax rate will remain at 40%, making proactive planning essential

“If your net worth is between $7 million and $25 million, you may think estate taxes don’t affect you—but in 2026, they will.” – Roby Kotcamp

4. Tax Planning Strategies Before 2026

With just under two years before the changes take effect, now is the time to implement strategies to minimize tax exposure.

• Income Tax Planning:
  • Consider accelerating income before 2026 while rates are lower
  • Plan for deductions and credits that will be phased out
  • Optimize qualified business income (QBI) deductions while available
• Estate and Gift Tax Strategies:
  • Use irrevocable trusts, such as spousal lifetime access trusts (SLATs)
  • Leverage charitable lead trusts (CLTs) and qualified personal residence trusts (QPRTs)
  • Strategically gift assets now to lock in the current exemption levels

5. Why You Should Act Now

Waiting until 2025 to take action could lead to missed opportunities. By then, estate attorneys and tax professionals will be overwhelmed with last-minute planning requests.

“If you wait until 2025, estate planning attorneys may be fully booked. The best time to act is now.” – Matt Griffith

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Final Thoughts

The sunset of the TCJA will bring sweeping tax changes that could significantly impact high-net-worth individuals and business owners. Whether it’s planning for higher income tax rates, estate tax implications, or taking advantage of the current tax code, proactive planning is crucial.

To discuss how these changes affect your financial strategy, contact Matt Griffith at mgriffith@centurawealth.com or Roby Kotcamp at rkotcamp@centurawealth.com.

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Disclaimer

The information covered and posted represents the views and opinions of the guest and does not necessarily represent the views or opinions of Centura Wealth Advisory. The content has been made available for informational and educational purposes only. The content is not intended to be a substitute for professional investing advice. Always seek the advice of your financial advisor or other qualified financial service provider with any questions you may have regarding your investment planning.

Centura Wealth Advisory (Centura) is an SEC-registered investment advisor with its principal place of business in San Diego, California. Centura and its representatives are in compliance with the current registration and notice filing requirements imposed on SEC-registered investment advisors in which Centura maintains clients. Centura may only transact business in those states in which it is notice filed or qualifies for an exemption or exclusion from notice filing requirements. Past performance is no guarantee of future results. Tax relief varies based on client circumstances, and all clients do not achieve the same results.

The financial services industry has undergone a major transformation, shifting from commission-based models to fee-based Registered Investment Advisors (RIAs). While this change aimed to align client and advisor interests, it also led to the bundling of investment management with financial planning—raising the question:

Are clients actually getting maximum value from bundled services?

In this episode of Live Life Liberated, Derek Myron, CFP®, Managing Director, and Sean Clark, Director of Financial Planning, discuss:

• The rise of the fee-based RIA model
• Above-the-line vs. below-the-line planning—what truly moves the needle
• How high-net-worth individuals can optimize income tax, wealth transfer, and balance sheet management
• Steps to take if you feel underserved by your current financial team

The Evolution of Financial Services: From Commissions to RIAs

How Did We Get Here? A Brief History

Financial services have evolved dramatically, from commission-based brokers to fiduciary-focused RIAs:

• Pre-1980s: Trust and estate planning was primarily for Rockefeller-level wealth
• 1980s-1990s: Stockbrokers dominated the market, earning commissions on trades
• 1990s-2000s: Discount brokers and online trading changed the game, leading to fee-based models
• 2000s-Present: RIAs grew significantly, emphasizing fee transparency and fiduciary responsibility

“The RIA industry didn’t really take hold until the 2000s, when access to information and online trading made commissions obsolete.” – Derek Myron

What Does It Mean to Be a Fiduciary?

Unlike brokers who follow a suitability standard (recommending acceptable products), RIAs must adhere to a fiduciary standard—meaning they are legally obligated to act in the best interest of the client.

“Being a fiduciary means finding the best-in-class solutions—not just the products our firm endorses.” – Sean Clark

However, as RIAs expanded, many firms began bundling services, raising concerns about whether clients were receiving tailored, high-value financial planning or simply a one-size-fits-all approach.

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Above-the-Line vs. Below-the-Line Planning: Where’s the Value?

At Centura Wealth Advisory, planning is categorized into two levels:

Below-the-Line Planning: Necessary but Incremental

These services support investment management but don’t necessarily drive exponential financial outcomes:

❏ Cash flow planning
❏ Asset allocation and location
❏ Basic stress testing

“Below-the-line planning is helpful, but it’s not what transforms a client’s financial future.” – Derek Myron

Above-the-Line Planning: Where the Real Impact Happens

For high-net-worth individuals, true financial impact comes from above-the-line services:

❏ Income tax planning – Forward-looking strategies to reduce lifetime tax burden
❏ Wealth transfer planning – Structuring assets to maximize intergenerational wealth
❏ Balance sheet optimization – Managing debt, asset structuring, and liquidity events

“Income tax planning isn’t just about this year—it’s about the next 5, 10, or even 20 years.” – Sean Clark

While most financial firms offer planning, it’s often bundled with investment management, making it difficult for clients to measure true value.

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The Problem with Bundled Financial Services

Why Do Firms Bundle?

Many firms bundle planning with investment management to:

• Increase client retention by adding perceived value
• Differentiate themselves in a competitive investment management space
• Create a “sticky” client relationship where it’s harder to separate services

But for high-income earners and ultra-high-net-worth families, bundled services often result in surface-level planning that lacks depth and customization.

“Bundled planning often does just enough to justify an AUM fee, but not enough to deliver transformative results.” – Derek Myron

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The Case for Unbundling: Paying for What You Need

Why Separating Services Matters

Unbundling financial services provides greater transparency and accountability. Clients can:

❏ Clearly define what they are paying for in investment management vs. financial planning
❏ Measure value by comparing services and outcomes
❏ Ensure planning is proactive, not reactive

“A clear, delineated value proposition ensures that clients know exactly what they’re paying for and what results they should expect.” – Sean Clark

Who Benefits Most from Unbundling?

For individuals with $20M+ in net worth and $2M+ in annual income, specialized tax and wealth transfer planning can yield significant financial advantages.

“When you reach a certain level of wealth, incremental planning isn’t enough—you need strategic, proactive financial guidance.” – Derek Myron

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How to Assess Your Financial Team: Are You Getting Maximum Value?

If you’re unsure whether you’re getting the best financial advice, consider these steps:

Step 1: Self-Assessment

❏ Am I paying for bundled services without understanding their value?
❏ Do I have income tax pain and need forward-looking strategies?
❏ Is my estate structured for efficient wealth transfer?

Step 2: Ask Your Professionals the Right Questions

✔ CPA: Do you provide forward-looking tax consulting, or just compliance?
✔ Estate Attorney: Are you considering my entire financial picture, or just drafting documents?
✔ Financial Advisor: What is your process for proactive income tax and balance sheet optimization?

“If your financial team can’t articulate their process, it’s a red flag.” – Sean Clark

Step 3: Consider a Second Opinion

If you suspect you’re underserved, it’s worth consulting with a fiduciary advisor who offers specialized planning and a clear fee structure.

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Final Thoughts: Is It Time to Unbundle?

For many high-net-worth individuals and business owners, unbundling financial services leads to:

❏ Greater clarity on where fees are going
❏ Higher-quality financial planning tailored to complex needs
❏ More control over wealth, taxes, and long-term strategy

If you’re ready to explore an unbundled, results-driven approach to financial planning, connect with Derek Myron at dmyron@centurawealth.com or Sean Clark at sclark@centurawealth.com.

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Disclaimer

The information covered and posted represents the views and opinions of the guest and does not necessarily represent the views or opinions of Centura Wealth Advisory. The content has been made available for informational and educational purposes only. The content is not intended to be a substitute for professional investing advice. Always seek the advice of your financial advisor or other qualified financial service provider with any questions you may have regarding your investment planning.

Centura Wealth Advisory (Centura) is an SEC-registered investment advisor with its principal place of business in San Diego, California. Centura and its representatives are in compliance with the current registration and notice filing requirements imposed on SEC-registered investment advisors in which Centura maintains clients. Centura may only transact business in those states in which it is notice filed or qualifies for an exemption or exclusion from notice filing requirements. Past performance is no guarantee of future results. Tax relief varies based on client circumstances, and all clients do not achieve the same results.