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Understanding Advanced Estate Planning Tax Strategies

  • Parkview Partners Capital Management
  • Oct 13
  • 3 min read

When building a lasting legacy, high-net-worth individuals and families may face significant tax implications that can impact the wealth transferred to future generations. Implementing advanced estate planning tax strategies may help preserve assets and ensure intentions are carried out efficiently. These approaches are not just about managing taxes; they are also about thoughtful wealth transfer, philanthropy, and the goal of securing your family’s financial future


This guide provides an overview of several sophisticated techniques that may help manage estate, gift, and generation-skipping transfer (GST) taxes. Because every financial situation is unique, these concepts are intended for educational purposes only. Always work with qualified legal, tax, and financial professionals to determine which strategies are appropriate for your circumstances.


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Grantor Retained Annuity Trusts (GRATs)


A GRAT is an irrevocable trust sometimes considered to transfer asset appreciation with potentially reduced gift-tax consequences. The grantor contributes assets and receives fixed annuity payments for a set term.


At the end of the term, remaining assets — including appreciation above the IRS Section 7520 rate — may pass to beneficiaries with transfer-tax efficiency. Outcomes depend on asset performance, timing, and documentation


Implementation checkpoints:


  • Select assets with high growth potential (e.g., pre-IPO stock, concentrated equity).

  • Evaluate appropriate term length and mortality risk.

  • Consider a “zeroed-out” GRAT structure to minimize gift-tax impact.


Spousal Lifetime Access Trusts (SLATs)


A SLAT is an irrevocable trust one spouse creates for the other’s benefit, moving assets outside the taxable estate while maintaining indirect access through distributions.


Implementation checkpoints:


  • Avoid reciprocal trust issues by ensuring the trusts differ in structure.

  • Fund the trust with assets that are clearly the donor spouse’s separate property.

  • Consider divorce or death implications in drafting.


Charitable Remainder Trusts (CRTs)


A CRT allows assets to be transferred into a trust, providing an income stream for a set term or life, with the remainder going to charity. Depending on the terms, donors may receive an income-tax deduction for the present value of the charitable gift.


If highly appreciated assets fund the trust, the CRT may sell them without immediate capital gains tax, potentially allowing reinvestment of the full value


Implementation checkpoints:


  • Choose between CRATs (fixed annuity) and CRUTs (percentage revalued annually).

  • Confirm IRS requirements for charitable beneficiaries.

  • Align charitable goals with tax and estate strategy.


Irrevocable Life Insurance Trusts (ILITs)


An ILIT owns a life insurance policy, allowing proceeds to potentially pass outside the taxable estate. The grantor gifts funds to the ILIT to cover premiums, often structured to qualify for the annual gift exclusion.


Implementation checkpoints:


  • Three-Year Look-Back Rule: If transferring an existing policy, the grantor must survive three years for exclusion. (Source: IRS rules on estate taxation.)

  • Crummey Powers: Beneficiaries typically receive withdrawal rights to qualify gifts under the annual exclusion.

  • Trustee should be independent and capable of managing policy and distributions.


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Conclusion: Navigating Advanced Estate Planning


GRATs, SLATs, CRTs, and ILITs represent only a subset of advanced estate planning tax strategies available. Each tool carries unique benefits, rules, and limitations. The suitability of any option depends on personal wealth, family dynamics, and long-term objectives.


Coordinating with your legal, financial, and tax advisors is essential. This collaborative approach helps ensure that your estate plan is not only tax-efficient but also aligned with your broader vision for legacy and wealth transfer.



Investment advice offered through Stratos Wealth Partners, Ltd., a registered investment advisor. Stratos Wealth Advisors, LLC and Parkview Partners Capital Management are separate entities. Neither Stratos nor Parkview Partners Capital Management provides legal or tax advice. Please consult legal or tax professionals for specific information regarding your individual situation. Please consult with your professional advisors before taking any action. Past performance is not a guarantee of future results. To discuss how these strategies might apply to your specific situation, *contact Parkview Partners Capital Management* for a personalized consultation.


 
 
 

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Financial Advisor, Investment Advisor, High Net Worth, Wealth Management, Tax Planning, Risk Management, Financial Coordination, Retirement Planning, Charitable Giving, Columbus Ohio, Parkview Partners Capital Management

291 East Livingston Ave.
Columbus, OH 43215


Phone: (614) 427-2132

Fax: (614) 427-2132

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