Wealth Management

Wealth management refers to a comprehensive approach to managing an individual’s financial affairs and assets to help them achieve their financial goals. It involves a combination of financial planning, investment management, tax planning, estate planning, and other financial services to optimize wealth growth and protection.

  1. Estate Planning

The practice of organizing and managing a person’s assets and affairs to ensure that their wishes are carried out in the event of their death or incapacity is known as estate planning. It includes making choices on the distribution of one’s assets and possessions, the management of those assets, and the prospective handling of healthcare and financial decisions.

Estate planning aims to minimize uncertainties, protect assets, reduce potential tax burdens, and provide for the smooth transfer of wealth to beneficiaries. It is typically recommended to consult with an estate planning attorney or other qualified professionals to ensure that the estate plan is tailored to an individual’s specific circumstances and in compliance with relevant laws and regulations.

Key elements of estate planning typically include:

  1. Will: A will is a legal document that specifies how a person’s assets will be distributed upon their death. It can also designate guardianship for minor children and name an executor to manage the estate.
  2. Trusts: Trusts are legal arrangements that allow a person (the grantor) to transfer their assets to a trustee who manages them on behalf of beneficiaries. Trusts can help avoid probate, provide specific instructions for asset distribution, and offer potential tax benefits.
  3. Powers of Attorney: Powers of attorney grant authority to someone else to make financial or healthcare decisions on behalf of an individual if they become unable to do so themselves due to illness, incapacity, or other circumstances.
  4. Advance Healthcare Directive/Living Will: These documents outline an individual’s preferences for medical treatment and end-of-life care, including decisions regarding life support, resuscitation, and organ donation.
  5. Beneficiary Designations: Ensuring that beneficiary designations are up to date on financial accounts, retirement plans, life insurance policies, and other assets is crucial to ensuring that those assets pass to the intended beneficiaries.
  6. Charitable Giving: Estate planning can also involve provisions for charitable donations or setting up a charitable foundation or trust to support causes important to the individual.
  7. Retirement Accounts

In North Carolina, individuals have access to various retirement accounts to help them save and plan for retirement. Here are some common types of retirement accounts available:

  1. 401(k) Plans: These employer-sponsored retirement plans allow employees to contribute a portion of their pre-tax salary to a retirement account. Employers may also offer matching contributions, making 401(k) plans an attractive option for retirement savings. Contributions and investment earnings in a 401(k) grow tax-deferred until withdrawal, typically in retirement.
  2. Individual Retirement Accounts (IRAs): IRAs are personal retirement accounts that individuals can open and contribute to on their own. There are two primary types of IRAs:

a. Traditional IRA: Contributions to a traditional IRA are typically tax-deductible, and investment earnings grow tax-deferred until withdrawal. Withdrawals in retirement are subject to income tax.

b. Roth IRA: Roth IRA contributions are made with after-tax dollars, meaning contributions are not tax-deductible. However, qualified withdrawals in retirement are tax-free, including earnings. Roth IRAs offer potential tax advantages for individuals who expect to be in a higher tax bracket in the future.

  1. Simplified Employee Pension (SEP) IRA: SEP IRAs are retirement plans for self-employed individuals and small business owners. Contributions are made by the employer and are tax-deductible. SEP IRAs generally follow the same rules as traditional IRAs regarding tax treatment.
  2. Simple IRA: Simple IRAs are retirement plans for small businesses with fewer than 100 employees. Both employers and employees can contribute to these plans. Contributions are tax-deductible, and earnings grow tax-deferred until withdrawal.
  3. 403(b) Plans: 403(b) plans are retirement plans typically offered by public schools, colleges, universities, and certain tax-exempt organizations. They operate similarly to 401(k) plans, allowing employees to contribute pre-tax income, and contributions and earnings grow tax-deferred.
  4. 457 Plans: These retirement plans are available to employees of state and local governments, as well as some non-profit organizations. Contributions to 457 plans are tax-deferred, and withdrawals are typically allowed penalty-free after retirement.
  5. North Carolina State Retirement System: North Carolina state employees, including teachers, have access to the North Carolina Retirement Systems. This system includes various pension plans and retirement options for eligible public employees.
  6. South Carolina Retirement Systems (SCRS) : Is a defined benefit retirement program for staff members of state agencies, public school districts, public higher education institutions, charter school districts, and other public workforces. For various categories of local and state employees, South Carolina’s base retirement system has six iterations, such as: SCRS, PORS, JSRS, GARS, SCNG, and ORP. For more information, check out South Carolina Public Employee Benefit Authority (PEBA) website: http://www.peba.sc.gov/
  7. Long-Term Care Insurance

Long-term care insurance (LTCI) is a type of insurance that helps cover the costs associated with long-term care services, such as nursing home care, assisted living, and in-home care. In North Carolina, individuals have access to various long-term care insurance options from different insurance providers. 

  1. Charitable Giving and Philanthropy

Charitable giving and philanthropy involve the act of donating money, resources, or time to charitable organizations or causes with the intention of making a positive impact on society. It is a selfless act that is done voluntarily with the intention of improving society, addressing social problems, and advancing the wellbeing of those who are less fortunate.

Charitable giving and philanthropy play a vital role in addressing social needs, supporting vulnerable populations, advancing research and innovation, and fostering positive change. By engaging in philanthropic activities, individuals and organizations can contribute to building a better society and improving the well-being of others

  1. Reverse Mortgages

Despite being a form of home loan, a reverse mortgage is not the traditional one that most homeowners opt for. Instead of paying monthly payments to the lender, these homeowners will get money from the bank and decide whether to accept it as a line of credit, a fixed monthly payment, or a single lump sum. Most often, homeowners 62 years of age or older with high home equity are eligible for this type of financing.

Through a reverse mortgage, these homeowners are able to borrow money against the value of their properties. Consider it a way for homeowners to get access to the money they’ve accumulated in their properties over time to pay for retirement living costs.

  1. HUD-backed Home Equity Conversion Mortgage (HECM). This is the most common, and popular type of reverse mortgage loan. The borrower must be 62 or over to qualify, and you can borrow up to $765,600. These loans are federally insured and backed by HUD. Therefore, to get one of these loans, borrowers must pay insurance premiums, which flow into the Federal Housing Administration (FHA) reserves
  2. Single-Purpose Reverse Mortgage. This type of loan is the cheapest type of reverse mortgage. It’s available for low- or moderate-income homeowners, and it is designed for one purpose, like a home improvement project, designated by the lender.
  3. Proprietary Reverse Mortgage. This is a loan through a private company, and it is the most uncommon reverse mortgage scenario. A borrower can use a proprietary reverse mortgage for any reason, or for multiple reasons. These generally allow for a higher loan amount than the HECM program.
  4. Debt Management