Building substantial wealth is a remarkable achievement. However, preserving that capital across generations requires deliberate forethought. Without a structured succession and tax strategy, cumulative taxes such as income tax, capital gains, and estate tax can significantly diminish a family’s net worth for the following generations.

Fortunately, the tax code isn’t just a list of rules. If used strategically, it provides a helpful framework for transferring wealth efficiently. By utilizing the appropriate legal and financial instruments, families can shift assets and income to future generations while reducing their overall tax burden.

We have several key strategies that we can utilize in relevant multi-generational wealth situations.

Intra-Family Loans: Funding the Next Generation

When assisting children with acquiring real estate, or funding a new enterprise, or just seeding an investment portfolio, an outright gift is not the only option. An intra-family loan offers a tax-favored alternative.

• How it works: Our clients extend a loan to their child, documented with a promissory note. Crucially, the loan must carry an interest rate at or above the minimum rate established by the IRS, known as the Applicable Federal Rate (AFR).
• The Tax Advantage: The primary advantage results from the child investing the principal at a return that exceeds the AFR. The excess growth accumulates to the child and bypasses our client’s estate, effectively transferring wealth free of gift and estate taxes to the younger generation.

In addition, interest payments are paid back to our client rather than to a commercial institution, keeping the money in the family. Often, our client will forgive the interest payments (within the annual gift tax exclusion) to increase the overall tax attractiveness.

Irrevocable Trusts and Strategic Gifting: Providing Guardrails for Protection

Transferring wealth outright to the next generation exposes assets to potential creditors, legal judgments, or marital dissolutions. Irrevocable trusts can offer both guardrail protections and tax benefits.

Additionally, trust agreements can be carefully structured to establish guidelines for distributions, preserving trust assets for their intended long-term purposes — including education, housing, healthcare, and other significant life needs — while providing protection against unforeseen circumstances, such as a future divorce.

• How it works: Assets are transferred into irrevocable trusts designed for the benefit of children and grandchildren, leveraging annual gift tax exclusions and lifetime exemptions as future growth accumulates inside the trust, not in our client’s estate. As of 2026, the federal annual gift tax exclusion is $19,000 per recipient, and each individual is entitled to an additional $15 million lifetime exemption from federal gift and estate taxes. That is effectively a $30 million lifetime exemption for a married couple today.
• The Tax Advantage: Once assets are placed inside an irrevocable trust, both the principal and all subsequent appreciation are removed from the grantor’s taxable estate.

Note. The $15 million per person lifetime estate tax exemption is relatively new, as it was raised to this amount in 2025. This would appear to substantially reduce the number of our clients who would want to take advantage of these planning opportunities. However, as has happened before, a new administration in D.C. may implement new laws that could lower these lifetime estate tax exemptions.

Family Limited Partnerships (FLPs): Balancing Control and Valuation Discounts

For our client families managing substantial real estate holdings, marketable securities, or operating businesses, Family Limited Partnerships (FLPs) can serve as an effective tax-advantaged vehicle.

• How it works: Assets are moved into a client created FLP, a non-taxable event. Our client retains the General Partnership interests, maintaining full control over management, operations, and investment decisions, while gifting Limited Partnership interests to their children, all at once or in stages.
• The Tax Advantage: Because limited partners lack managerial control and cannot unilaterally liquidate their interests, the IRS permits “valuation discounts” on the gifted units. For example, if our client gifts a 10% slice of real estate worth $1 million to a child, the IRS might value it at a discounted rate (say, $700,000) for gift tax purposes because of those restrictions. This discount allows our clients to transfer a larger proportional share of wealth utilizing a smaller portion of their lifetime estate tax exemption.

Spousal Lifetime Access Trusts (SLATs): Maintaining Access to Funds

A common hesitation regarding irrevocable trusts is the permanent relinquishment of control and access to capital. A Spousal Lifetime Access Trust (SLAT) addresses this concern.

• How it works: Either the husband or wife of a client couple can use a percentage of their lifetime estate tax exemption to establish and fund an irrevocable trust for the benefit of the other spouse and potentially their descendants.
• The Tax Advantage: The gifted assets and future growth on them are excluded from both of our clients’ taxable estates. Because one spouse is a beneficiary, the client family retains indirect access to trust distributions if financial needs arise.

Some clients may wish to establish two SLATs, one each for the other spouse. However, this strategy requires careful drafting to avoid the IRS applying the reciprocal trust doctrine, under which each spouse could be treated as having created a trust for his or her own benefit. If that were to occur, the trust assets could be included in each spouse’s taxable estate, defeating many of the intended estate tax benefits. To mitigate this risk, reciprocal SLATs should not be substantially identical. An experienced estate planning attorney can incorporate meaningful differences between the trusts while still achieving the couple’s overall planning objectives.

Family Business Recapitalization and Succession Planning

Transitioning a privately held operating business presents unique governance challenges, particularly when balancing our client’s children active in the business with those pursuing outside endeavors.

• How it works: A corporate recapitalization of a “C” corporation restructures the business equity into two distinct classes: voting shares, retained by the founder to maintain operational control, and non-voting shares, which can be gifted or sold to the next generation, particularly those not working in the business.
• The Tax Advantage: Non-voting shares typically qualify for a valuation discount because they lack voting rights and control, similar to non-managing interests in Family Limited Partnerships (FLPs). This can allow our client business owners to transfer ownership to the next generation gradually and in a more tax-efficient manner. When combined with a well-designed succession plan, this strategy can facilitate a smooth transition of leadership and ownership, promote business continuity, and help minimize potential estate tax exposure and family conflicts.

Maximizing the Step-Up in Basis

A cornerstone of traditional estate planning is the optimization of capital gains tax rules upon the passing of a client.

• How it works: Generally, assets purchased and sold during one’s lifetime trigger capital gains tax on appreciation. Long-term capital gains (for assets held longer than one year) are taxed in progressive tiers determined by our client’s total taxable income.

15% Bracket: Applies to most earners, covering income above basic     thresholds up to $545,500 (single) or $613,700 (married filing jointly) in 2026.

20% Bracket: The maximum baseline rate, applied to capital gains exceeding those high-income limits.

23.8% Effective Rate: High-income clients face an additional 3.8% Net Investment Income Tax (NIIT) once Modified Adjusted Gross Income crosses $200,000 (single) or $250,000 (married), increasing the top 20% capital gains rate to an effective 23.8%.

However, assets held until death receive a step-up in basis adjustment and eliminate accumulated capital gains.

• The Tax Advantage: Under current law, assets transferred at death receive a step-up in basis, resetting their tax valuation to the fair market value at the date of death. This mechanism effectively eliminates all prior accumulated capital gains, allowing heirs to sell the inherited asset with little to no capital gains tax liability.

For married clients in Community Property states such as Texas, Community Property comes with a significant income tax advantage upon the first spouse’s death. Both spouses’ interests in Community Property receive a step-up in tax basis to the asset’s fair market value as of the date of death—not just the deceased spouse’s share. This can substantially reduce, or potentially eliminate, the capital gains tax that would otherwise be incurred if the surviving spouse later sells the assets.

The tax benefits can continue upon the surviving spouse’s death. Assets inherited by the next generation receive another step-up in basis to their fair market value at that time. As a result, heirs may be able to sell the assets with little or no capital gains tax, potentially eliminating significant built-in capital gains over the course of both spouses’ lifetimes.

As discussed in our third article in this series on Investing, our long-term planning in managing one’s investment portfolio can greatly expand this benefit.

Conclusion: An Integrated Approach to Wealth Preservation

Successful wealth preservation and transfer require more than individual planning techniques; they require a coordinated strategy. Estate planning tools such as Family Limited Partnerships (FLPs), Spousal Lifetime Access Trusts (SLATs), intra-family loans, and step-up-in-basis planning are most effective when thoughtfully integrated into a comprehensive, multi-generational wealth plan. When these strategies work in concert, along with proactive coordination with wealth advisors, qualified estate planning attorneys, and tax professionals, they can enhance tax efficiency, strengthen asset protection, and help preserve our client’s wealth and capital for generations to come. 

Financial freedom means having the clarity and confidence to make decisions that reflect your life, not just your balance sheet. Private wealth management can help women navigate life’s transitions and shape their future on their terms.  

When I sit across the table from a woman stepping into full control of her finances for the first time, I see someone who wants to know if she will be okay.

Through years of helping women with life’s big transitions, whether divorce, widowhood, or retirement, I have seen that true financial freedom goes well beyond a specific dollar amount in an investing account. Freedom means knowing you have options, knowing you have support, and most importantly, knowing you do not have to face the future alone.

Financial freedom is having enough to choose your future, not just survive. Women navigate financial challenges that are fundamentally different from those that men face. Mothers must balance raising children against their careers. They are also disproportionately called on to care for aging parents. Every woman makes their own choices about these realities. I work with women who strategically plan for longer careers to ensure they can support the retirement lifestyles they envision, as well as those who are committed to maintaining their financial independence should they outlive their partners.

There are no wrong choices. But well-managed private wealth empowers these women to shape their lives on their terms instead of being pushed down paths they would not have chosen.

Our job is to listen to those choices and share whatever guidance or resources women need to make their goals a reality. And part of that is building trust and making room for questions. I never want one of my clients to feel embarrassed about asking a question. Whether it is about a type of investment, required minimum distributions, margin loans, or just how to read or understand a statement, every question deserves respect.

Women are savvy, financially disciplined investors. But until recently, we were not always prioritized in financial education and family discussions around money. My female clients often come to me unsure of what they do not know. Empowering them is creating an environment where they feel secure enough to ask the important questions they have and gain the clarity they need.

Women influence financial outcomes more than they realize. Women’s opinions and instincts matter even in couples where the husband leads the conversations. I always make a point of paying attention to the wife in meetings, even when she is quiet. Women are often the ones guiding family decisions behind the scenes. Understanding that unspoken influence and ensuring women feel equally heard and respected is a key part of good and effective advising.

Over the last few years, more of my work is with women – highly successful professionals facing the complex demands that come with growing wealth, and some who are navigating the complexities of inherited wealth after losing a spouse. By helping them understand what they have, what steps to take, and the decisions ahead – at a pace that feels right for them – I provide them the clarity and confidence to move forward with peace of mind.