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Ep. 87 Investing Amidst Uncertainty: A 2024 Election Discussion with Michael Townsend

With the 2024 U.S. presidential election approaching, investors are facing increased market uncertainty. Geopolitical tensions, potential tax law changes, and congressional instability—including the ousting of the Speaker of the House and the risk of a government shutdown—are all adding to the complexity.

In this episode of Live Life Liberated, Matt Griffith, CFP®, Senior Wealth Advisor, and Chris Osmond, CFA, CAIA®, CFP®, Chief Investment Officer, speak with Michael Townsend, Managing Director of Legislative and Regulatory Affairs at Charles Schwab & Company, about what investors can expect in the months ahead.

Key Topics Covered:

The current political landscape and market uncertainty
The speculation around Biden or Trump dropping out
The potential impact of a split Congress on tax and financial policy
How markets historically perform before and after elections
Why long-term investment strategies matter more than short-term political shifts

The 2024 Election: Political and Market Implications

What Investors Need to Know About the Political Landscape

Washington is experiencing one of its most volatile political cycles in decades. Speaker of the House Kevin McCarthy’s removal in October 2023 created legislative gridlock, and a looming government shutdown threatens further uncertainty. Meanwhile, foreign policy concerns, including Ukraine, Israel, and China-Taiwan tensions, add another layer of unpredictability.

“October 2023 was the nuttiest month I’ve seen in Washington in my 30 years here.” – Michael Townsend

With inflation, interest rates, and economic growth in flux, investors must navigate the election cycle carefully.

Will Biden or Trump Drop Out?

Speculation continues about whether President Biden or former President Trump will ultimately be on the 2024 ballot. Concerns about Biden’s age and health persist, while Trump faces multiple legal challenges.

“My operating assumption is we will have a Biden-Trump rematch. But there are a lot of voters who are unenthusiastic about this potential matchup.” – Michael Townsend

Despite these uncertainties, investors should focus on policy outcomes rather than political drama.

A Divided Government: What It Means for Tax and Economic Policy

What’s at Stake in Congress?

Republicans need two Senate seats to regain control.
Democrats are poised to retake the House, potentially flipping both chambers.
If Congress is split, expect continued gridlock and delayed policymaking.

“We have never had an election where the House and Senate flipped in opposite directions—it would be unprecedented.” – Michael Townsend

A divided Congress could mean prolonged inaction on key financial policies, particularly tax reform.

The 2025 Tax Cliff: What Investors Should Prepare For

One of the biggest post-election issues will be the expiration of the 2017 Tax Cuts and Jobs Act (TCJA). Key provisions set to sunset in January 2026 include:

✔ Higher marginal tax rates (top rate returning to 39.6%)
✔ Estate tax exemption cut in half (from ~$26M per couple to ~$13M)
✔ Changes to deductions and pass-through business tax rules

“The estate tax is one of the least partisan tax issues in Washington—many Democrats support maintaining higher exemptions due to its impact on family-owned businesses.” – Michael Townsend

While some provisions may be extended, expect heated debates over revenue needs and deficit reduction.

Market Performance and Investment Strategies During Election Years

How Do Markets Historically Perform in Election Years?

Historically, election years have been strong for the markets. Since 1928, the S&P 500 has averaged a 7.5% return in presidential election years.

“Markets tend to perform well during an election year—uncertainty creates volatility, but history suggests solid returns.” – Michael Townsend

However, policy implementation takes time, meaning major shifts often don’t happen immediately post-election.

Does Political Party Impact Market Performance?

While many assume one party is better for the markets than the other, historical data suggests otherwise:

✔ The market has performed better under Democratic presidents (5–6% higher annual returns)
✔ The best configuration for market stability? A Democratic president with a Republican-controlled Congress
✔ Unified governments—regardless of party—show similar market performance

“There is almost no difference in market performance under a unified Republican or Democratic government—investors should focus on broader economic trends.” – Michael Townsend

How Investors Should Approach Election-Year Volatility

What to Avoid: Emotional Decision-Making

Election years often trigger fear-driven investment moves. Many investors:

❌ Delay investments until after the election
❌ Sell assets prematurely due to uncertainty
❌ Overreact to political rhetoric

“Elections are emotional events, but investors should focus on long-term goals, not short-term politics.” – Michael Townsend

How to Stay on Track

✔ Maintain a diversified portfolio – Election cycles introduce short-term volatility, but diversification helps mitigate risk.
✔ Monitor tax policy changes – High-net-worth individuals should work with advisors to optimize tax strategies ahead of potential shifts.
✔ Ignore the headlines – Most campaign promises never translate into real policy. Focus on long-term investment fundamentals.

“No policy in Washington is ever guaranteed—investors should be wary of pundits claiming otherwise.” – Michael Townsend

Final Thoughts: Cutting Through the Noise

With political uncertainty, tax policy changes, and market volatility, staying disciplined is key. Instead of reacting to headlines, investors should:

✅ Assess their long-term financial goals
✅ Prepare for potential tax changes in 2025
✅ Consult with advisors to optimize their investment strategy

If you need guidance navigating the 2024 election’s impact on your portfolio, contact Centura Wealth Advisory at (858) 771-9500 or visit centurawealth.com.

For ongoing insights, listen to Michael Townsend’s podcast, WashingtonWise, available on Apple Podcasts and Spotify.

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.

November 22, 2023

NEWS, PODCASTS

Ep. 86 Keys to Building an Amazing Corporate Culture and a Rockstar Team

Fostering a Thriving Corporate Culture in a Hybrid World

With hybrid work environments becoming the norm, many companies struggle to maintain a strong culture, attract top talent, and build cohesive, high-performing teams. At Centura Wealth Advisory, we have implemented innovative strategies to create an engaging, supportive, and productive workplace—whether employees are in San Diego or working remotely across the country.

In this episode of Live Life Liberated, Derek Myron, Founder and CEO and Jonathan Freeman, COO, discuss the principles behind Centura’s workplace culture, including leadership practices, team-building traditions, and the importance of communication and trust.

The Challenges of Expanding a Team Across the Country

Centura has grown rapidly, expanding from a primarily San Diego-based firm to a national presence with remote employees across the U.S. This shift has presented challenges, including:

Maintaining cohesion among in-office and remote employees
Ensuring new team members align with Centura’s high standards of excellence
Developing an engaging and supportive culture that encourages long-term retention

“Not everyone is walking the same halls or in the same meetings, so leadership must be intentional about creating cohesion and camaraderie,” says Freeman.

Building Culture Through Intentional Practices

A strong culture doesn’t happen by accident—it requires deliberate actions from leadership. At Centura, several practices help reinforce team unity and engagement:

Waffle Wednesdays – A weekly tradition where Centura’s leaders serve breakfast to the team, fostering an open and collaborative environment.
The 48-Hour Rule – Employees are encouraged to directly address workplace concerns within 48 hours to prevent unresolved issues from festering.
FreshBiz Thinking – A problem-solving mindset that encourages collaboration across departments to tackle challenges efficiently.
Business Coaching with Mitch Simon – Monthly leadership development sessions that enhance team dynamics and communication.

“Culture isn’t just one aspect of the game—it is the game. If you don’t foster it daily, it can quickly degrade,” says Freeman.

The Power of Communication & Trust in High-Performing Teams

At Centura, clear communication is the foundation of team success. A few key principles help maintain alignment across the organization:

Managing Promises: Employees follow a structured approach to commitments—either agreeing, declining, promising to promise, or renegotiating.
Condition of Satisfaction (COS): Before making a commitment, employees clarify expectations to ensure alignment.
No Daylight in the Say-Do Gap: Team members are expected to follow through on commitments, fostering accountability and reliability.

By instilling these habits, Centura ensures that every team member is empowered to take ownership of their work while maintaining trust across all levels of the organization.

Final Thoughts: Creating a Rockstar Team

Building a high-performance team requires intentional leadership, clear communication, and a commitment to continuous improvement. Whether through leadership coaching, structured team-building exercises, or fostering a culture of accountability, Centura’s approach demonstrates that a strong corporate culture leads to better client outcomes and employee satisfaction.

“An organization is only as strong as its weakest link. If we invest in our people, develop their skills, and foster a culture of collaboration, we create an environment where everyone thrives,” says Myron.

To learn more about Centura Wealth Advisory and its unique approach to leadership and culture, listen to the full episode now.

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.

November 8, 2023

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NEWS, PODCASTS

Ep. 85 How Centura Creates Value for High-Net-Worth Individuals

As wealth increases, financial planning needs become more complex. Centura Wealth Advisory (Centura) specializes in serving high-net-worth and ultra-high-net-worth individuals, helping them optimize taxes, protect assets, and structure their wealth efficiently.

In this episode of the Live Life Liberated podcast, Kyle Malmstrom and Sean Clark, MBA, share insights into Centura’s Liberated Wealth® process and discuss advanced planning strategies that help clients retain and grow their wealth.

Why Centura Stands Apart

Many wealth management firms offer broad financial planning, but Centura focuses on above-the-line planning, meaning income tax, wealth transfer, and balance sheet optimization. These elements help clients reduce tax liabilities and optimize their overall financial picture.

“Being able to save people money on income taxes is unique. Wealth transfer is another area, but really income tax planning is where we move the needle.” — Sean Clark

Unlike traditional firms that focus on marginal tax bracket adjustments or standard wealth management, Centura dives deep into the tax code to find advanced strategies tailored to individual client needs.

The Importance of Early Planning

Timing is critical when it comes to tax and wealth transfer planning. Centura categorizes planning windows into three phases:

Gold Period: Before receiving an LOI (Letter of Intent) for a business sale, when the most impactful planning can occur.
Silver Period: Between receiving an LOI and the end of the tax year, when meaningful strategies can still be implemented.
Bronze Period: After the tax year closes, where options become limited.

“The worst conversation is, ‘I just signed my LOI yesterday. What can I do?’ Well, you could have talked to us six months ago.” — Kyle Malmstrom

The best outcomes happen when planning starts 12 to 36 months before a major liquidity event. However, even last-minute strategies can still create value when executed properly.

Centura’s Due Diligence Process

With over 50 advanced planning strategies, Centura ensures every recommendation is thoroughly vetted. The firm employs a rigorous due diligence process that includes:

Analyzing tax and legal risks to ensure compliance.
Assessing economic viability to confirm financial benefits.
Evaluating custodians and sponsors to select the best partners for implementation.

“These aren’t garage-band strategies. If you get it wrong, you’re going to face issues. You need people who have done this dozens of times and know the nuances.” — Kyle Malmstrom

This level of scrutiny prevents clients from falling into risky or unproven tax strategies and ensures they receive proven, reliable solutions.

Who Benefits Most from Centura’s Planning?

Centura’s services provide the most value to individuals who:

Earn $2 million+ in income or have a net worth of $20 million+.
Have complex tax issues that persist over multiple years.
Are experiencing a money-in-motion event, such as the sale of a business or real estate.
Need customized tax and wealth strategies beyond traditional financial planning.

For these individuals, Centura aims to deliver at least 5x ROI on tax savings relative to its fees.

Optimize Your Wealth with Centura

If you’re looking for sophisticated tax and wealth strategies tailored to your unique financial landscape, Centura Wealth Advisory can help.

Connect with Centura:

(858) 771-9500
LinkedIn: 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. 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.

October 25, 2023

NEWS, PODCASTS

Ep. 84 Delivering Exponential Client Value via Joint Casework with Gregg Gottlieb

The Power of Joint Casework in Wealth Advisory

Advisors, are you looking to deliver exceptional value to your high-net-worth clients? The wealth management landscape is evolving, and collaboration is proving to be a key driver of success. In this episode of Live Life Liberated, Samantha Lawrence, CFP®, Associate Advisor at Centura Wealth Advisory (Centura), speaks with Gregg Gottlieb, CFP®, co-founder of Regal Wealth Advisors, about his experience with joint casework through Centura’s Elite Advisor Collaboration Program (EACP).

Why Collaboration Matters in Wealth Management

Gregg discusses how partnering with Centura transformed his approach to financial planning, enabling him to provide deeper, more sophisticated strategies to his clients.

“Most people in our industry tend to keep things close to the vest, driven by ego and financial incentives. But when you embrace joint casework, you realize the value of collaboration—both for the advisor and the client.”

Joint casework allows advisors to leverage specialized expertise, streamline planning processes, and deliver more comprehensive solutions to their clients.

A Real-World Example: Transforming a Client Experience

Gregg shares a powerful example of how joint casework with Centura made a significant impact on one of his long-time clients:

“I had a client who had spent 25 years delaying key financial decisions because he couldn’t find independent advice he trusted. After just one call with Centura, he engaged. The structured process, regular check-ins, and accountability completely changed his financial outlook.”

Through Centura’s Liberated Wealth® Process, the client not only gained a clear roadmap for his financial future but also ensured all legal and financial documents were executed correctly—something that had been overlooked for years.

Key Benefits of Joint Casework

Gregg highlights the tangible benefits of working with Centura:

Better client outcomes: Clients receive comprehensive, tailored solutions that address complex wealth management needs.
Practice efficiency: Advisors gain structured processes that improve client engagement and ensure accountability.
Professional growth: Exposure to sophisticated planning strategies enhances advisors’ knowledge and service capabilities.

“This experience has been both financially and professionally rewarding. The structured approach Centura brings is something I’ve now incorporated into my own practice.”

Why Advisors Should Consider Joint Casework

For advisors hesitant about joint work, Gregg offers this advice:

“Test the waters with a client you trust. Introduce them to Centura as a way to explore new solutions. You’ll quickly see the value of collaboration.”

With Centura’s Elite Advisor Collaboration Program, advisors can expand their capabilities, elevate their service model, and ultimately create exponential value for their clients.

Learn More

To explore how Centura Wealth Advisory can support your practice through joint casework, call us at (858) 771-9500.

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.

September 27, 2023

NEWS, PODCASTS

Ep. 83 ING Trusts: How to Minimize State Income Taxes

The Power of an ING Trust: Reducing State Income Taxes

For high-net-worth individuals living in high-tax states, state income taxes can be a significant financial burden. However, there is a way to lower these taxes without physically moving: an Incomplete Non-Grantor (ING) Trust. In episode 83 of Live Life Liberated, Centura Wealth Advisory’s Kyle Malmstrom and Roby Kotcamp explain how ING Trusts work, their benefits, and potential pitfalls to avoid.

Why Consider an ING Trust?

“Moving your assets, not your address, is a key strategy for minimizing state income taxes,” says Malmstrom.

State tax rates vary dramatically across the U.S. While some states, like South Dakota, have no state income tax on trusts, others, like California and Hawaii, impose rates exceeding 10%. By transferring assets to an ING Trust domiciled in a zero-tax state, individuals can reduce their tax liability without uprooting their lives.

Who Can Benefit from an ING Trust?

Not all assets are suitable for an ING Trust. Kotcamp outlines the ideal candidates for this strategy:

Business owners planning an equity sale (not asset sales)
Individuals with highly appreciated stock or other investment assets
Those with income-generating portfolios who do not require immediate access to the funds

“Anything in the capital gains category, like a concentrated stock position or a business sale, is a prime candidate for an ING Trust,” Kotcamp explains.

The Mechanics of an ING Trust

To take full advantage of this strategy, it’s crucial to follow the correct sequence of steps:

Establish the Trust: The ING Trust is created in a state with no income tax on trusts (e.g., South Dakota, Wyoming, or Nevada).
Transfer Assets: The highly appreciated assets are re-registered in the name of the ING Trust before any sale.
Complete the Sale: Once inside the trust, the assets are sold, ensuring that the transaction occurs in the tax-friendly state.
Reinvest the Proceeds: The funds remain in the trust and continue growing tax-free from a state income tax perspective.

By executing these steps correctly, individuals can legally avoid paying state income taxes on qualifying transactions.

Potential Pitfalls to Avoid

While an ING Trust can be an effective tax-saving tool, there are key considerations:

Bad Drafting: Incorrect trust language can jeopardize the tax benefits. “You need an experienced attorney who understands ING Trusts inside and out,” warns Malmstrom.
State-Level Challenges: Some states, like California and New York, have passed legislation that disqualifies ING Trusts.
Misuse of Distributions: Pulling money from the trust improperly can negate the tax savings. Instead, structured loans or strategic distributions should be considered.
Step Transaction Doctrine: The IRS may scrutinize the timing of asset transfers and sales to determine if the trust was established solely for tax avoidance.

Alternatives for California Residents

With the passage of SB 131, California has effectively eliminated the use of ING Trusts. However, Kotcamp highlights alternative solutions:

Inter Vivos QTIP Trust: This strategy can achieve up to 75% of the tax savings an ING Trust offers.
ESBT Election for S-Corps: Certain business owners can structure their income in a way that minimizes state taxes.
Strategic Relocation: If planned correctly, physically moving at a later date can still offer tax advantages.

Is an ING Trust Right for You?

“ING Trusts have been around for over 20 years, but they require precise execution,” says Malmstrom. If you’re considering selling a business or managing highly appreciated assets, working with an experienced wealth advisory team is essential.

Centura Wealth Advisory specializes in tax-efficient planning for high-net-worth individuals. To explore whether an ING Trust or alternative strategy is right for you, contact us at Centura Wealth Advisory or call (858) 771-9500.

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.

August 31, 2023

Real estate, keychain with house symbol. Key with finance blank.

NEWS, PODCASTS

Ep. 82 The QPRT Strategy: How to Reduce Estate and Gift Taxes

When planning to pass wealth to future generations, minimizing estate and gift taxes is a key consideration. One strategy that offers significant tax advantages is the Qualified Personal Residence Trust (QPRT). In this episode of Live Life Liberated, Seth Meisler, CFA, CFP®, CPA/PFS, MBA, and Samantha Lawrence, CFP®, discuss how the QPRT strategy works, its tax benefits, and who is an ideal candidate.

What is a Qualified Personal Residence Trust (QPRT)?

A QPRT is an irrevocable trust designed to transfer a primary or secondary residence to beneficiaries while reducing the taxable value of the gift. The grantor retains the right to live in the home for a set period, after which ownership transfers to the beneficiaries at a reduced gift tax value.

Key Benefits of a QPRT

Reduces the taxable value of the residence, lowering estate and gift taxes.
Ensures the home remains in the family while mitigating tax burdens.
Provides asset protection by placing the property in a trust.
Allows grantors to continue living in the home for a predetermined term.

“This is the vanilla ice cream of tax planning strategies,” says Seth Meisler. “It’s simple, IRS-approved, and works every time.”

How Does a QPRT Work?

The grantor transfers the residence into the QPRT.
The grantor retains the right to live in the home for a set term (e.g., 10-20 years).
At the end of the term, the property transfers to the beneficiaries at a reduced gift tax value.
If the grantor wants to continue living in the home after the term, they must pay rent to the beneficiaries, further reducing their taxable estate.

Maximizing Tax Benefits with QPRTs

Two key methods help reduce the taxable value of the residence:

Fractional Interest Discounting: By splitting ownership into multiple QPRTs, grantors can claim valuation discounts, reducing the taxable gift amount.
Term Length: The longer the retained interest period, the lower the gift tax value—though this increases the risk that the grantor may not outlive the term.

“We call it the ‘squeeze, freeze, and burn’ technique,” explains Samantha Lawrence. “We squeeze down the value, freeze it outside the estate, and burn down the taxable estate over time.”

Who is a Good Candidate for a QPRT?

A QPRT is most effective for individuals with:

A high-value primary or secondary residence they intend to keep in the family.
An estate large enough to be subject to estate tax.
Children or heirs who will receive the property.
Good health, ensuring they outlive the QPRT term to maximize benefits.

“It’s a heads-you-win, tails-you-tie strategy,” Meisler says. “If you survive the term, you win. If you don’t, you’re back to where you started.”

Potential Risks and Considerations

While QPRTs provide significant tax advantages, there are some risks:

The grantor must outlive the QPRT term for the tax benefits to apply.
If the home is sold before the term ends, additional planning is required.
If the grantor wants to stay in the home post-QPRT, rent payments are required.
The property does not receive a step-up in basis, potentially leading to higher capital gains tax for heirs if sold.

Enhancing QPRTs with a Protected Strategy

One variation is the Protected QPRT, which pairs the trust with an intentionally defective grantor trust (IDGT) and life insurance to:

Offset estate taxes if the grantor passes before the QPRT term ends.
Fund property maintenance to prevent financial burdens on heirs.
Provide liquidity for estate equalization among beneficiaries.

A QPRT is a highly effective tool for individuals looking to transfer their homes to heirs while minimizing estate and gift taxes. It is a time-tested, IRS-approved strategy that ensures wealth preservation across generations. However, careful planning is essential to navigate potential risks and ensure the strategy aligns with long-term goals.

For more details on QPRTs and other wealth planning strategies, listen to the full Live Life Liberated episode linked above.

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.

August 16, 2023

insurance form, calculator and pen on the table

INSURANCE SOLUTIONS, NEWS, PODCASTS

Ep. 81 How to Achieve Tax Efficiency With Private Placement Life Insurance With Chris Hyman

Understanding Private Placement Life Insurance (PPLI) for High-Net-Worth Individuals

For high-net-worth and ultra-high-net-worth individuals, protecting and growing wealth while minimizing taxes is a key priority. However, not all assets generate tax-efficient income, making tax planning strategies essential. One such strategy is Private Placement Life Insurance (PPLI), which offers tax efficiency, flexibility, and investment customization.

In this episode of the Live Life Liberated podcast, host Derek Myron speaks with Christopher Hyman, Director of Insurance Solutions at Centura Wealth Advisory, to break down PPLI and its benefits for wealthy investors.

What Is Private Placement Life Insurance (PPLI)?

PPLI is a specialized life insurance policy designed for individuals with a net worth of $10 million or more. It allows tax-inefficient assets—such as hedge funds, private credit, or highly appreciated assets—to grow in a tax-advantaged environment.

“PPLI is a bucket that has low fees, very high flexibility, and high investment customization. It’s a tax-efficient bucket for tax-inefficient income.” – Christopher Hyman

Key Benefits of PPLI for Wealthy Investors

PPLI offers several significant advantages, including:

Tax efficiency: Investment gains within PPLI grow tax-deferred and can be accessed tax-free.
Lower costs: PPLI policies typically carry insurance fees of 1% or less of the account value.
Investment flexibility: Unlike traditional insurance policies, PPLI allows for a wide range of investment choices, including private equity and hedge funds.
Estate planning benefits: PPLI can be structured to transfer wealth tax-efficiently to future generations.

“You’re basically trading tax drag for minimized insurance charges. If structured properly, it’s not even close; it’s such a valuable trade-off.”
– Christopher Hyman

Who Should Consider PPLI?

PPLI is best suited for high-net-worth individuals who:

Have at least $10 million in net worth
Own highly appreciated assets or tax-inefficient investments
Seek a tax-advantaged wealth accumulation strategy
Want a customized investment approach with flexibility

The Role of Professionals in PPLI Planning

Implementing PPLI requires a team of experts to ensure compliance and optimal structure. According to Christopher Hyman, the four essential professionals in a PPLI strategy include:

Investment Advisor: Manages and selects investments within the PPLI structure.
Insurance Design Expert: Ensures proper structuring to minimize fees and optimize benefits.
Attorney: Drafts the necessary legal entities and trust structures.
CPA: Advises on tax implications and compliance requirements.

“This is not a set-it-and-forget-it strategy. You need an experienced team to design and maintain it properly.”
– Christopher Hyman

Potential Risks and Considerations

While PPLI provides significant benefits, investors should be aware of potential risks:

Investment risk: Like any investment, returns are not guaranteed.
Loss of control: The policyholder cannot dictate specific asset purchases, adhering to investor control rules.
Compliance complexities: Policies must meet diversification requirements and legal guidelines.
Legislative risks: Tax laws could change, impacting the tax advantages of PPLI.

Is PPLI Right for You?

PPLI is a powerful tool for high-net-worth individuals seeking tax efficiency, investment flexibility, and estate planning benefits. However, proper structuring and professional guidance are essential for success.

To learn more about PPLI and its application to your financial situation, contact Centura Wealth Advisory or ask to review their monthly Private Placement Life Insurance Webinar Series.

For more insights, listen to the full episode of the Live Life Liberated podcast linked above.

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.

August 2, 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