The Complete Guide to
Private Wealth
Care & Strategy

What it is in plain terms: A SLAT is a legal structure in which one spouse creates an irrevocable trust — meaning it cannot be taken back — naming the other spouse as a beneficiary. Assets transferred to the trust leave the creator's taxable estate permanently, along with all future appreciation. Because the other spouse can receive distributions from the trust for their health, education, maintenance, and support, the couple still has indirect access to those assets while they remain outside the taxable estate.

Why it is powerful: Each spouse can create a SLAT for the other. Done correctly (with meaningful differences in trust terms to avoid the "reciprocal trust doctrine"), both spouses can use their $15 million lifetime exemption — effectively sheltering $30 million of wealth plus all future appreciation from estate tax. A $10 million portfolio transferred to a SLAT today, growing at 7% annually, becomes $19.7 million in 10 years — and none of that growth is ever subject to estate tax.

The grantor trust feature: SLATs are typically structured as grantor trusts — meaning the creator pays income taxes on the trust's earnings. This is a feature, not a bug. Those income tax payments are additional tax-free gifts to the trust that allow it to compound without the annual drag of income tax. Over 20 years, this "invisible" additional gifting can add millions to the trust's value.

The important risk: If the beneficiary spouse dies or the couple divorces, access to trust assets ends. This is why the strategy must be approached thoughtfully and why the two SLATs must not be mirror images of each other.

What it is in plain terms: An IDGT is a specialized irrevocable trust that has a built-in legal inconsistency — it is designed to be treated as outside your estate for estate tax purposes, but treated as owned by you for income tax purposes. That inconsistency is the entire point: it allows you to sell assets to the trust without recognizing any taxable gain (because you are essentially selling to yourself from an income tax standpoint), while still legally removing the assets from your taxable estate.

The installment sale technique: The trust is first funded with a seed gift — typically about 10% of the total value to be transferred. Then, you sell additional assets to the trust in exchange for a promissory note at the applicable federal interest rate (the minimum rate the IRS requires for related-party loans). The trust pays back the note over time using the income and appreciation from the assets inside. Everything above the interest rate — all the appreciation, all the growth — stays in the trust, outside your estate, forever.

Why this is so powerful for business owners: The business interest is transferred at its current value before the sale happens or the company grows further. All appreciation between the transfer date and your death benefits your heirs, not your estate. And because the trust is a grantor trust, you pay the income taxes on the trust's earnings each year — which is an ongoing additional transfer to the trust, tax-free.

What it is in plain terms: A GRAT is a trust you fund with assets expected to appreciate significantly. You retain the right to receive an annuity payment for a fixed term — typically 2 to 10 years — and at the end of the term, whatever is left in the trust passes to your heirs free of gift tax. The gift tax calculation uses a formula based on the IRS interest rate in effect when the trust is created. If your assets grow faster than that rate, the excess passes to your heirs with no additional tax.

The "zeroed-out" GRAT: By sizing the annuity payment so its present value equals the amount contributed, the taxable gift to heirs is effectively zero. You get back what you put in — and your heirs get everything that grew above the IRS hurdle rate. If the assets do not outperform the hurdle, you simply get your assets back with no downside. This is why GRATs are sometimes called "heads I win, tails I break even" strategies.

Best uses: GRATs work particularly well for concentrated stock positions expected to appreciate, closely held business interests before a value-creation event (product launch, new contract, pre-IPO), and any asset where near-term appreciation is reasonably predictable.

What it is in plain terms: A Family Limited Partnership is a legal entity that holds family investment assets — real estate, a portfolio, business interests — and divides ownership between general partners (who control the entity) and limited partners (who own economic interests but have no management rights). You and your spouse typically serve as general partners through a separate LLC, retaining control. Interests in the FLP are then gifted or sold to children, grandchildren, or trusts.

The valuation discount — where the magic is: A minority interest in an FLP that lacks control and cannot be easily sold is worth less than the proportional value of the underlying assets. A qualified business valuator can support discounts of 20% to 35% for lack of control and lack of marketability. This means $10 million of economic value can be transferred using only $6.5 to $8 million of lifetime exemption — effectively stretching the $15 million exemption significantly further.

The legitimate business purpose requirement: An FLP must have a genuine business purpose beyond estate planning — investment management, asset protection, centralized family investment decision-making. The formalities must be maintained: separate accounts, regular partnership meetings, no commingling of personal and partnership assets. We coordinate with your estate attorney to ensure the structure is properly documented and maintained.

What it is in plain terms: A dynasty trust is an irrevocable trust designed to hold wealth for multiple generations — your children, their children, and potentially grandchildren and beyond — without being subject to estate tax at each generation. Without a dynasty trust, wealth is taxed at each transfer: at the parent's death, again at the child's death, and again at the grandchild's death. At a 40% estate tax rate, three generations of taxation can consume more than 78% of the original wealth.

The generation-skipping transfer (GST) tax: The GST tax is a second layer of tax specifically designed to prevent families from skipping a generation to avoid estate tax. The good news: the GST exemption matches the estate and gift tax exemption — $15 million per person in 2026. Allocating GST exemption to a dynasty trust protects up to $15 million of assets from both estate tax and GST tax across all future generations.

The compounding effect over time: $5 million placed in a properly structured dynasty trust with GST exemption allocated, growing at 7% annually, becomes approximately $98 million in 50 years — and none of that growth is ever subject to estate tax or GST tax at any generational transfer.

What it is in plain terms: Life insurance death benefits are income-tax-free — but if you own the policy yourself, the death benefit is included in your taxable estate. For a $10 million policy, that can mean $4 million going to estate taxes on the very proceeds meant to pay those taxes. An ILIT solves this by owning the policy in a trust outside your estate. The policy pays to the trust, the trust is outside your estate, and the $10 million passes to your beneficiaries income-tax-free and estate-tax-free.

Funding the ILIT with annual gifts: Premium payments are made as gifts to the trust using the annual gift tax exclusion — $19,000 per beneficiary in 2026. The trust uses those gifts to pay the premiums through a mechanism called Crummey withdrawal rights, which gives beneficiaries a brief window to withdraw the gift (they typically do not exercise this right) before the trustee uses the funds to pay premiums. We manage this process, track the notices, and ensure the gifts qualify for the annual exclusion each year.

The estate liquidity function: Even with a $15 million exemption, large estates can face estate tax on amounts above that threshold. An ILIT holding a survivorship policy (paying at the death of the second spouse, when the estate tax is actually due) provides liquid cash to pay that tax without forcing the sale of illiquid assets like a business, real estate portfolio, or art collection.

The core principle: Under current tax law, appreciation in asset value is not taxed until the asset is sold. Loan proceeds are not income. And assets held until death receive a full step-up in basis — eliminating all accumulated capital gain. These three facts, taken together, describe the most powerful wealth accumulation architecture available to private investors.

Buy: Accumulate appreciating assets — real estate, securities, business interests, fine art, private equity — inside tax-efficient structures. The appreciation compounds without annual tax as long as no sale occurs.

Borrow: Instead of selling appreciated assets to access cash, borrow against them. A securities-backed line of credit (SBLOC) allows you to borrow 50–70% of your investment portfolio's value at competitive rates, with the portfolio staying fully invested. A cash-out refinance pulls equity from appreciated real estate as tax-free loan proceeds. Art-secured loans generate liquidity from an appreciated collection at 40–50% of appraised value. None of these create taxable events.

Die: Assets held until death receive a stepped-up cost basis to fair market value under IRC Section 1014. All of the capital gain — decades of appreciation, all the unrealized gain on the real estate, all the low-basis stock — is eliminated. Beneficiaries inherit at current value and can sell immediately with no capital gains tax. Outstanding loans are repaid using a portion of those assets at the stepped-up basis, also with no capital gains tax.

What most people miss about art: Fine art acquired with documented investment intent is a capital asset — it appreciates outside of traditional financial markets, can be borrowed against at 40–50% of appraised value through specialty lenders (Athena Art Finance, Sotheby's Financial Services), and receives the full step-up in basis at death. A collection acquired at $2 million that grows to $8 million over 30 years produces zero capital gains tax at death. The heirs inherit at $8 million and can sell immediately with no tax.

The charitable planning opportunity: Donating appreciated art directly to a museum or charitable institution that will use it in furtherance of its charitable purpose generates a charitable deduction at full fair market value — eliminating the capital gain and producing a deduction against ordinary income. On a $3 million painting with a $200,000 cost basis, the donor avoids $784,000 of capital gains tax (at 28% collectibles rate) and receives a $3 million charitable deduction. The related-use rule applies: the charity must actually use the art in its tax-exempt mission.

Tax rate note: Long-term capital gains on art and collectibles are taxed at 28%, not the 20% rate applicable to most investments. This makes the step-up at death and charitable donation strategies particularly valuable for art.

What it is in plain terms: A Charitable Remainder Trust is a legal structure that allows you to contribute a highly appreciated asset — real estate, securities, a business interest, art — to a trust. The trust then sells the asset without paying capital gains tax and reinvests the full proceeds. You receive an income stream from the trust for your lifetime or a specified term of years. When the trust ends (at your death or end of term), whatever remains passes to charity. In exchange, you receive an immediate income tax deduction equal to the present value of that charitable remainder.

The financial alchemy: On a $5 million asset with a $200,000 basis, a direct sale produces $4.8 million of gain and approximately $1.1 million of capital gains tax, leaving $3.9 million to invest. A CRT sells the asset tax-free and invests all $5 million. The higher invested base generates a materially larger income stream for your lifetime. The CRT also generates an immediate charitable deduction — often $1 million to $2 million depending on the payout rate and your age — which offsets current-year income tax.

Wealth replacement with an ILIT: For clients who want to maintain the full inheritance for their children while still benefiting from the CRT, the income stream can be used to fund premiums on a life insurance policy held in an ILIT. The death benefit of that policy — paid income-tax-free and estate-tax-free — replaces the wealth that will eventually pass to charity. This combination — CRT plus ILIT — is one of the most sophisticated charitable planning structures available.

The wash sale rule does not apply to crypto: Under current law, the wash sale rule — which prevents investors from selling securities at a loss and immediately buying them back to harvest the tax loss — does not apply to cryptocurrency. This means crypto investors can sell a position at a loss, immediately repurchase the same or similar position, and still recognize the tax loss for current-year purposes. For investors with significant crypto holdings across multiple positions, year-round tax-loss harvesting can generate substantial loss offsets against other income.

Capital gains rate: Cryptocurrency held for more than one year is taxed at long-term capital gains rates (0%, 15%, or 20% plus 3.8% NIIT depending on income). Crypto held for one year or less is taxed at ordinary income rates — up to 37%. The distinction makes holding period management critical for large positions.

Charitable strategy for highly appreciated positions: Donating appreciated cryptocurrency directly to a donor-advised fund eliminates the capital gain entirely and generates a full fair market value charitable deduction. On a Bitcoin position with a $10,000 cost basis now worth $500,000, direct donation avoids $112,700 of capital gains tax (at 23.8% combined rate) and produces a $500,000 charitable deduction.

Estate planning for digital assets: Standard estate planning documents — wills, revocable trusts, powers of attorney — often do not address digital asset wallets. Who has the private keys? How will a fiduciary access them? What happens if the private keys are lost? We coordinate with estate counsel on specific trust drafting provisions and digital asset access protocols.