Tax & Wealth Planning Strategies for Individuals & Families

The United States is facing a shifting legal and economic environment that will substantially impact estate planning and wealth transfer structures. High net worth individuals must pay close attention to new conditions and how they will impact their wealth planning strategies. Experts warn that now is the time to seek professional guidance to weather the storm and safeguard financial legacies.

Given the upcoming changes in tax laws, regulatory environments, and economic conditions, it is vital for high net worth individuals to proactively review and adjust their wealth planning strategies. Collaborating with an estate planning professional will help individuals protect their wealth, optimize tax savings, and ensure a smooth transition for future generations.

Five Key Factors Affecting Estate Planning This Year

Reduction of the Estate Tax Exemption: Effective January 1, 2026, the estate tax exemption is set to be effectively cut in half from about $13 million per person to about $7 million per person, depending on inflation. This reduction will make taxable some estates that would have previously avoided the tax and impose a greater tax on estates exceeding the revised threshold. While 2026 seems like a long way off,  individuals must proactively evaluate now and potentially restructure their estate plans to mitigate the impact of the revised estate taxes.

New Scrutiny of Grantor Trusts: Grantor trusts, a popular estate planning structure utilized to minimize estate taxes, are facing increased scrutiny from politicians in Washington. Recently discussed legislative changes may limit or eliminate the benefits of these trusts. Estate plans relying on the grantor trust structure may need to be reassessed and alternative structures considered.

Reduced Privacy with the Corporate Transparency Act: The Corporate Transparency Act is eliminating some vital elements of privacy associated with using LLCs and similar business structures. High net worth individuals using these structures for asset protection and confidentiality will need to adapt to new regulations, potentially with high administration costs and lower privacy protections.

Increased IRS Scrutiny: The Internal Revenue Service (IRS) has announced plans to bolster its workforce by adding over 80,000 new agents over the next ten years. This expansion signals the potential for increased scrutiny of estate plans by tax collectors. Individuals with tax-mitigating structures must ensure their plans are compliant and effectively managed, and they may face higher administrative costs.

Challenging Economic Environment: An uncertain economic environment characterized by elevated inflation, high interest rates, and the looming potential of a recession adds further complexity to wealth planning. Growth-oriented estate planning structures may become less attractive due to increased market volatility, and alternative structures may be necessary.

To navigate this increasingly complex landscape, high net worth individuals are strongly encouraged to seek guidance from experienced estate planning professionals. These experts possess the knowledge and expertise necessary to navigate the intricate web of legislative changes, taxation considerations, and economic uncertainties that lie ahead.

To learn more about navigating the challenges of wealth planning in the evolving landscape, contact David Frederick, J.D., LL.M., Senior Manager of High Net Worth Taxes and Planning at LBMC, PC at david.frederick@lbmc.com.

Our in-depth experience and expertise in federal, state and local tax regulations has earned the trust of numerous leading companies, as well as affluent families and individuals. Our CPAs conquer complex tax needs every day – often in conjunction with wealth planning services to give you the most beneficial result. You can count on us to provide comprehensive tax representation with the utmost integrity, confidentiality and personal attention for your specific tax need.

• Federal State and Local Tax Returns
• Tax Planning
• Tax Advisory Services

When planning the transfer of wealth to successive generations, you need advisors who are adept at the intricacies of federal and state estate and gift tax laws.

Our advisors are experts at uncovering tax-advantaged avenues for clients who wish to pass on more rather than less. We listen to you and weigh the roles of income, gift and estate tax planning to choose vehicles appropriate for you. Our services are comprehensive and coordinated, covering related topics of wills, and trusts of varying kinds. You get the benefit of our in-depth experience and personal service for an estate plan that is arranged and executed to your wishes, and of course, the peace of mind that comes with it.

• Review of estate plans, including wills, trusts, beneficiary designations, etc.
• Evaluation and use of various types of trusts
• Trusts under will
• Living Trusts
• Charitable Trusts
• Asset Protection Trusts
• Planning for Family Education
• Recommendations based upon your specific family needs
• Foundations

Comfortable retirement is all in the planning. And that’s exactly what our financial experts do every day.

Our income and retirement plan specialists listen carefully to your needs to determine options that will prove beneficial for you. We’ll help discern the amount of capital required to fund your retirement, probable sources of income in addition to investment earnings, social security possibilities, annuities, and how to plan for unforeseen circumstances.

Our unique integrated approach brings a coordinated effort among departments that are not available through traditional firms or sole solution providers. You can have confidence that our experience and personal service deliver results focus on your goals and your future.

LBMC Wealth Advisors also offer coordinated tax and investment advice with our partners at LBMC Investment Advisors, LLC, as well as family wealth planning, family office services, charitable planning, portfolio implementation, and valuation.