The current fiscal environment has created both challenges and opportunities for high-net-worth individuals and families. With estate tax exemptions set to sunset and capital gains rates under congressional review, proactive planning is essential.
One of the most powerful tools available right now is the Spousal Lifetime Access Trust (SLAT). By transferring assets into an irrevocable trust for a spouse, clients can effectively remove significant wealth from their taxable estate while retaining indirect access through the spouse's trust distributions. This strategy is particularly time-sensitive if the estate tax exemption is reduced as currently proposed.
For clients with concentrated equity positions, the charitable remainder trust (CRT) structure remains highly effective. A CRT allows you to diversify a low-basis position without triggering immediate capital gains, receive a charitable deduction, and generate an income stream — all while benefiting a charity of your choice at the end of the trust term.
Qualified Opportunity Zone investments continue to offer compelling deferral benefits. While the landscape has matured since the initial QOZ rush, well-structured investments in qualifying census tracts still provide meaningful tax deferral and potential step-up in basis after a 10-year hold.
Finally, clients with business interests should be reviewing buy-sell agreements in light of the recent IRS guidance on valuation methods. The Connelly decision has fundamentally changed how life insurance proceeds factor into business valuations for estate purposes, and existing agreements may need to be restructured accordingly.
The window for implementing these strategies may be narrowing. We encourage clients to schedule a planning review before Q3 2026.