5 Year-End Estate Planning Trends For High-Net-Worth Clients To Consider
The year is winding down, and the festive season is about to begin soon with Halloween, Thanksgiving, Diwali, Hanukkah, Christmas, and New Year’s all around the corner. But this time of year is also a perfect time to revisit your estate plan.
Estate planning for high-net-worth individuals is immensely important to ensure your wealth is protected, efficiently transferred, and aligned with your goals. Reviewing your estate plan before the year ends can help you start the new year with greater clarity and tie up any loose ends that may have been overlooked.
So, as the calendar turns, make sure your estate is in order, well-protected, and always under your control. Here are five year-end estate planning tipsto consider if you want to protect your assets and family.
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Below are 5 of the best strategies for estate planning for high-net-worth individuals:
1. Explore and understand different gifting strategies for high-net-worth estates and implement them
The end of the year is a good time to revisit your gifting strategy, especially as tax thresholds are set to change soon. There are two key gifting strategies for high-net-worth estates you should be familiar with – the annual gift tax exclusion and the lifetime gift and estate tax exemption.
Let’s start with the annual gift tax exclusion. In 2025, you can give up to $19,000 to different people without owing gift tax. If you are married, you and your spouse can give $38,000 in a single year. You can use these gifts to transfer wealth to your children, grandchildren, or anyone else (quite literally).
The person receiving the gift does not owe any taxes and usually does not even have to report it. But if you give someone more than $19,000 in a single year, you will need to file a gift tax return using IRS Form 709. You will not owe taxes, but any amount above the annual limit will count toward your lifetime gift and estate tax exemption. Spouses splitting gifts must also file Form 709, even if their combined gifts remain under the annual exclusion limit.
Let’s move on to the lifetime gift and estate tax exemption. For 2025, this exemption is set at $13.99 million per person. You can transfer up to this limit in assets over your lifetime or at death without incurring federal gift or estate tax. For married couples, this doubles to a combined exemption of $27.98 million. However, this exemption is scheduled to expire on December 31, 2025. So, if your estate falls in the high-net-worth category, this is the time to take advantage of the current limits. Families who have already used up their lifetime exemption can still transfer an additional $760,000 per person or $380,000 per spouse in 2025. Add in the $38,000 annual exclusion, and a couple could move nearly $800,000 in additional assets completely tax-free.
Keep in mind, though, that any portion of the lifetime exemption you use for gifting will reduce the amount available for your estate later. Once that exemption is used up, any amount above it is taxed at up to 40%. That is astronomical, right? So, gift while you can!
2. Set up those trusts if you haven’t already
Trusts are great for ensuring your wealth goes exactly where you want it to, under the conditions you choose. If you have not set them up yet, the end of the year is a great time to start. But before you use this year-end estate planning tip, let’s understand what a trust really is.
A trust is a legal arrangement between two main parties:
- The trustor, who can be you, the owner of the estate, and
- The trustee, who may be the person or entity that manages the trust’s assets.
You, as the trustor, transfer certain assets into the trust. The trustee then manages these assets according to your wishes. Trusts can hold just about anything. This includes your home, bank accounts, investments, business interests, and even personal items like jewelry or art. Once those assets are in the trust, they are managed under your instructions, not left to the slow and agonizing process of probate.
Now, there are different types of trusts, depending on factors such as flexibility, protection, and control. Here are some options you can consider:
- A revocable trust is a good option to begin with. It can be changed or even dissolved during your lifetime. It is flexible and allows you to stay in control at all times. You can add or remove assets and beneficiaries. A major perk is that assets in a revocable trust typically bypass probate.
- Then there is the irrevocable trust. Once you create it and move your assets into it, you generally cannot make changes. But once you set up this trust, the assets are no longer in your estate, which reduces estate and gift taxes. Another benefit is that it protects your wealth from future creditors.
- If you are married, you may consider setting up a marital trust, also known as an “A” trust. This type of trust ensures that, after you, your spouse is financially provided for. The assets within the trust, along with any income that they may generate, go straight to the surviving spouse according to the terms you have set.
- If you would like to donate, a charitable lead trust allows you to direct a portion of your assets to a charitable organization for a set period of time. After that time, whatever remains in the trust goes to your chosen beneficiaries. This can be your spouse, children, grandchildren, or other relatives.
- Speaking of grandchildren, if you have some and would like to support them financially, you can use a generation-skipping trust. This one lets you transfer assets directly to your grandchildren. So, you essentially circumvent your children’s generation, which simplifies the transfer process and helps reduce estate taxes that might otherwise apply with each generational transfer.
- If you are a parent and want to leave something for your children, you can use the Lifetime Asset Protection Trust (LAPT) instead. This trust can be used to support your children financially throughout their lives. But, without ever handing over direct ownership of the assets to them. Keeping assets inside the trust can also protect them from creditors and lawsuits.
- If you have concerns about potential claims or liabilities, you can consider an Asset Protection Trust (APT). This type of trust essentially separates certain assets from your personal ownership. Once the property is transferred into an APT, it belongs to the trust, not to you.
These are just a few examples. There are so many others. But before you decide which trust or combination of trusts makes sense for you, take inventory of what you own. Then, think about your goals and personal and financial situation. Also, consider speaking with a qualified financial professional specializing in estate planning for high-net-worth individuals.
3. Use Qualified Charitable Distributions (QCDs)
Do you have an Individual Retirement Account (IRA)? Are you interested in charity? If you check these two boxes, you can use a Qualified Charitable Distribution (QCD).
You may already know that once you cross 73, you will have to take Required Minimum Distributions (RMDs) from your IRA each year. These withdrawals are mandatory and taxable. With QCDs, you can transfer money from your IRA directly to a qualified charity, instead of taking RMDs. Why would you do this? To donate as per your wishes and yet avoid tax.
This year-end estate planning tip can benefit you if you are 70.5 years old or older. You can donate up to $108,000 in 2025 directly from your IRA using QCDs. This amount will rise to $115,000 in 2026, so you can also wait for next year. For couples with separate IRAs, each spouse can contribute up to the limit from their own account. You can even use up to $54,000 of that amount for a one-time donation to a Charitable Remainder Trust (CRT) or a Charitable Gift Annuity (CGA).
A QCD can be made from a traditional IRA, an inherited IRA, or even an inactive Simplified Employee Pension (SEP) plan or Savings Incentive Match Plan for Employees (SIMPLE) IRA. You donate to multiple charities as long as the total stays within the $108,000 cap.
Understand that QCDs are not just about short-term tax savings. They can also play a role in your long-term estate plan. Since the funds you donate are permanently removed from your IRA, your overall account balance decreases. So, your future RMDs and taxes will be lower, too.
4. Use a 529 account
Another year-end estate planning tip is to open a 529 education savings account or use an existing one to support your children or grandchildren’s education. A 529 plan can help fund tuition and other educational expenses and allows you to transfer wealth in a tax-efficient way. The five-year averaging rule is an interesting 529 strategy that can be helpful here. Let’s understand the contribution limits and five-year averaging rule:
In 2025, you can contribute up to $95,000 per year under the five-year rule. For married couples, the limit is increased to $190,000. This rule lets you merge five years’ worth of annual gift tax exclusions into one big contribution. You can give $19,000 per year for five years, totaling about $95,000, without triggering the federal gift tax. However, make sure to consider any other gifts made that year. For instance, if you have already gifted assets this year, say worth $5,000, your remaining eligible 529 contribution would be proportionately lowered for that year.
5. Talk turkey with your family and financial advisor
Perhaps the most important year-end estate planning tipis talking things through. As the year wraps up, sit down with your loved ones and your financial advisor to review your estate plan. A lot can change in just twelve months. You may have married, divorced, lost a loved one, or welcomed a new family member. The same could be true for your children or grandchildren. Life events like these can impact how your estate should be structured.
Make sure to discuss your intentions openly with your family to ensure everyone understands and accepts your wishes. Even if nothing significant has changed, use the opportunity to share your plans and make sure they still align with everyone’s current needs and relationships.
It is equally important to talk with your financial advisor or estate planner. They can help you understand the latest laws and opportunities, and also review your wills, trusts, and more.
Final thoughts: Review, refresh, and realign your estate plan
Estate planning for high-net-worth individuals can seem complicated, but a year-on-year review can help you keep everything under your control. So, while you plan your Halloween costume and start lighting up the Tree, do not forget to check and revise your estate plan, too. This will ensure that your documents stay up to date and your strategies align with your goals.
Also, speak to a financial advisor or estate planner who can help you shortlist the right estate planning strategy for high-net-worth individuals. You may explore our financial advisor directory to connect with an advisor near you.
Frequently Asked Questions (FAQs) about estate planning for high-net-worth individuals
1. What is the annual and lifetime gift tax exemption limit?
In 2025, you can give up to $19,000 as an individual and $38,000 per person if you are married. The lifetime gift and estate tax exemption is set at $13.99 million per person and $27.98 million for married couples in 2025.
2. How do trusts assist in estate planning for high-net-worth individuals?
Trusts give you control and protection over your assets. They can be used for a number of assets, from stocks and cash to the vintage paintings hanging on your wall. Trusts can determine how and when your wealth is distributed. They also protect your assets from creditors and reduce estate taxes.
3. What are some other year-end estate planning tips I can use?
The end of the year can be a good time to review or create essential documents such as wills, powers of attorney, and healthcare directives. If you own a business, you can also plan for succession in case of retirement or illness.
4. At what age should I start estate planning?
There is no set age. The answer is always now. Life is unpredictable, so establishing an estate plan now is important, even if you are young.
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