Published By Ari Greenman - Partner
With the Tax Cuts and Jobs Act (TCJA) sunset provision set to expire December 31, 2025, America’s wealthiest families may have just six months to transfer up to $28 million tax-free. Without Congressional action, the current lifetime estate and gift tax exemption—$13.99 million per person, $27.98 million per married couple—will be cut roughly in half, meaning families that miss this deadline could face hefty estate taxes.
The TCJA, passed in 2017, nearly doubled the lifetime estate and gift tax exemption. The last time families had a comparable wealth transfer opportunity was in 2010, when Congressional inaction led to a one-year repeal of the estate tax. Unlike that accidental repeal, today’s high exemption is an intentional and time-sensitive opportunity to act before the law reverts to pre-2017 levels.
Lawmakers are currently reviewing a sweeping tax proposal informally known as the “One Big Beautiful Bill,” which could extend or revise these exemptions. President Trump has publicly urged Congress to act before July 4, but given a divided legislature and competing priorities, the likelihood of a swift passage is far from guaranteed.
With this rare planning window potentially closing in six months, clients are relying on their advisors not just for technical planning, but for calm, strategic navigation. Helping families weather this uncertainty creates an opportunity for wealth advisors to demonstrate their full value.
Trust Structures In Action
Advanced estate planning tactics can help families lock in today’s high exemption levels while supporting long-term legacy goals. A thoughtful mix of strategies can both use the current exemption and shift future appreciation out of the estate.
Some of the most commonly used strategies include:
- Grantor Retained Annuity Trusts (GRATs): GRATs move appreciating assets out of an estate while providing the grantor with an income stream during a set term. If assets grow faster than the IRS’s assumed rate, that excess passes to heirs with little or no gift tax. This makes GRATs ideal for volatile or high-upside assets like concentrated stock positions, private equity stakes, or shares in a family business.
- Spousal Lifetime Access Trusts (SLATs): SLATs let one spouse gift assets to an irrevocable trust benefiting the other spouse and descendants. It removes wealth from the estate without fully giving it up, since the non-grantor spouse can still access the trust.
- Sales to Intentionally Defective Grantor Trusts (IDGTs): Parents sell assets to a trust for their heirs in exchange for a promissory note. The trust is intentionally "defective" for income tax purposes, meaning the parents still pay taxes on the trust’s income—a built-in benefit that allows the trust to grow faster. Meanwhile, any appreciation on the assets occurs outside the estate, and the parents receive note payments as an income stream.
- Family Limited Partnerships (FLPs): FLPs help families transfer ownership of closely held businesses or investment portfolios at a discount. Parents retain the general partnership interest and control, while transferring limited partnership interests to children or trusts. Because these limited interests don’t carry control or marketability, they often qualify for valuation discounts—commonly between 20–40%. It stretches the lifetime exemption while maintaining oversight of family assets.
- Charitable Lead Annuity Trusts (CLATs): CLATs pay an annuity to a charity for a set term, with remaining assets eventually passing to heirs. If the trust grows faster than the IRS rate, excess appreciation transfers tax-free. This strategy works well for families with charitable goals and appreciating assets.
- Dynasty Trusts: These trusts are long-term, multigenerational trusts that allow families to use their lifetime gift exemption to transfer wealth outside of their taxable estates permanently. Once funded, the assets and their future appreciation remain protected from estate taxes, generation after generation. The generation-skipping transfer (GST) tax exemption, which allows families to transfer wealth directly to grandchildren and great-grandchildren without additional tax, is also set to be cut in half when the TCJA sunsets.
Building Trust Under Pressure
Under this tight planning window and the uncertainty surrounding it, building trust becomes critical for wealth advisors managing multigenerational planning. Trust structures take about three to six months to implement properly, and with only months left before potential expiration, don’t delay taking action.
When the estate tax was accidentally repealed for a year in 2010, families could transfer unlimited wealth free of federal estate tax. Many clients took advantage of that opportunity, and few expressed regrets when the window closed. This experience proves that deadlines can be powerful motivators. In today’s case, even if the TCJA doesn’t sunset, the cost of inaction can be greater than waiting for the perfect circumstances.
Regardless of whether the “One Big Beautiful Bill” passes, many advisors are taking a “better safe than sorry” approach. That means getting paperwork started early, leaving room for flexibility, and using scenario planning to help families prepare for different outcomes.
Implementing large wealth transfer strategies often comes with anxiety about losing liquidity, and most importantly, control. Each generation brings different priorities, risk tolerances, and communication styles to this process. For instance, older generations typically are more concerned about younger generations’ ability to manage inherited wealth responsibly. By meeting clients in the middle, advisors can implement a mixture of transfer techniques that help the older generation have a degree of control while still maintaining flexibility.
Advisors must also be a central coordinator between trust attorneys, tax professionals, and insurance specialists. Attorneys need family decisions to draft trust documents, CPAs require asset valuations for tax planning, and insurance specialists need health information for policy applications. Staying nimble with clients, whether by hopping on a quick call or talking through any last-minute concerns, helps keep things moving smoothly amid all the moving parts.
Importance Of Succession Planning
As clients age and heirs take on more responsibility, a thoughtful succession plan becomes essential. Introducing a younger advisor early allows them to learn the family’s priorities and values over time, so they can step in naturally and continue the relationship without disruption. Beyond advisor relationships, top firms can use proprietary technology to track and record every interaction to decentralize this relational knowledge from the main advisor to the entire organization. That way, exceptional client service doesn’t have to skip a beat.
The families, advisors, and organizations who navigate this moment well—coordinating across generations, managing uncertainty, and executing sophisticated strategies under pressure—can emerge with relationships that last far beyond any single piece of legislation. The TCJA expiration deadline may be driving urgency, but the trust built now can define advisory relationships for decades to come.
Representatives do not provide tax and/or legal advice. Any discussion of taxes is for general informational purposes only, does not purport to be complete or cover every situation, and should not be construed as legal, tax or accounting advice. Clients should confer with their qualified legal, tax and accounting advisors as appropriate.
The views and opinions expressed in this article are those of the author/publisher and should not be relied upon for investment decisions. Past performance is no guarantee of future performance or market conditions
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