In this episode, we’re continuing our conversation about Ultra Tax Efficient Wealth Management℠—a new-to-market investment strategy designed to help high net worth investors defer capital gains taxes while keeping their portfolios liquid and growth-oriented.

If you haven’t listened to Episode 280 yet, go back and do that because it lays the foundation for everything we’re covering today, including how Robert and I discovered this strategy, vetted it thoroughly, and ultimately decided to offer it to our clients at Hendershott Wealth Management.

Today, we’re diving deeper into UTEWM℠ to talk about:

How this strategy compares to other common tax-deferral methods (and why others fall short)
What makes Ultra Tax Efficient Wealth Management℠ uniquely effective, flexible, and IRS-compliant
The technical underpinnings of the investment strategy, including the application of a long-short market-neutral overlay
How UTEWM℠ can be applied to retirement distribution planning to potentially save millions in taxes over a lifetime

Unlike most capital gains strategies that require sacrificing liquidity or chasing high-risk alternatives, UTEWM℠ relies on publicly traded stocks in efficient markets and uses a smart approach to defer gains while realizing strategic losses.

It’s a new way of thinking about wealth management, and it could significantly improve your long-term outcomes. It’s exciting, it's flexible, it's widely applicable, and it is better than most–if not all–of the current methods to minimize capital gains taxes.

The bottom line? You don’t have to settle for “bad investments with good tax benefits.” With UTEWM℠, you can aim for great investments with excellent tax benefits.

So if you have (or will have) substantial unrealized capital gains from assets such as employer/highly appreciated stock, business sale proceeds, or real estate, this episode is a must-listen.

Let’s get into it! ⬇️

Here’s what you’ll learn in this week’s episode of Love, your Money®:

01:26 A reminder of what UTEWMSM is: the strategic creation of taxable losses to offset gains, potentially saving you millions of dollars in capital gains taxes
03:28 Alternative ways to avoid capital gains that are “bad investments with good tax benefits”, like Qualified Opportunity Funds–and the opportunity costs they come with, especially if you’re saving for retirement
07:09 Solar Tax Equity Financing, and why it doesn’t meet Robert’s “big benefit, low risk” requirement for a good investment
08:13 What happens when you break IRS tax rules for the sake of a return–which is what we’d call “bad tax benefit, bad investment”
11:10 How UTEWM℠ differs from all other ways to defer paying capital gains taxes, including tax loss harvesting–where the opportunity to take losses tends to dry up over time
13:01 The difference between active management and UTEWM℠, why we’ve traditionally avoided it, and the mindset shift we had to make to embrace (and unlock) the potential of this strategy
15:05 The reliability and predictability of tax benefits, and why, in this case, “small return benefits” should be of interest to you as an investor
15:54 The breakdown of the costs of an Ultra Tax Efficient Wealth Management℠ strategy: trading, financing, and managing – and what can offset those costs
19:1

Hendershott Wealth Management, LLC and Love, your Money do not make specific investment recommendations on Love, your Money or in any public media. Any specific mentions of funds or investments are strictly for illustrative purposes only and should not be taken as investment advice or acted upon by individual investors. The opinions expressed in this episode are those of Hilary Hendershott, CFP®, MBA.

Jason K. Stearns, "The War That Doesn't Say Its Name: The Unending Conflict in the Congo" (Princeton UP, 2022)