It's not too late to do some clever tax planning for 2025 that will save money on your taxes — but if you wait until January, it will be too late.

When it comes to taxes, the best opportunities come from proactive planning throughout the year, rather than waiting until it's over.

For example, most families who have been saving and investing for some time will generate significant capital gains each year. Long-term capital gains rates can be as high as 20%, while short-term rates can be as high as 37%, depending on your income bracket.

An additional 3.8% tax, the net investment income tax (NIIT), applies to investors above certain income limits. For many, this tax bill can be considerable.

How to employ tax-loss harvesting

These gains can be offset with tax-loss harvesting strategies, which involve strategically selling securities at a loss, creating an offset to that year's capital gains, then replacing them with similar assets.

If the new assets perform similarly to the old ones, your portfolio ends up in a similar place, but through the strategic sale, you now have losses to offset potential gains, resulting in lower taxes. (There is nuance involved, such as complying with wash-sale rules, which should be navigated carefully to maximize the benefit.)

Most tax-loss harvesting is effective when it's opportunistic throughout the year. By January, it's too late to even think about it for the previous year.

If you wait until the end of the year, you might find a few assets in your portfolio that are down, but you'd likely find the most opportunities if you use tax-loss harvesting throughout the year.

Consider the market so far in 2025.

In April, the S&P 500 was briefly down as much as 20%, and a wide range of assets could have been opportunistically sold. But you had to be thinking about it throughout the year to be in a position to take advantage.

If you started thinking about tax losses now, you haven't completely missed opportunities for 2025, but you might have missed the best opportunity of the year.

Maximize your charitable contributions

For investors considering their charitable giving strategies, another opportunity for year-round tax planning is available.

If you have securities that have appreciated in value, you can donate them to a charity at their current fair market value (if they have been held for over a year).

Neither you nor the charity owes capital gains tax on the gift.

A moment of market upswing, which could occur at any point during the year, maximizes both the tax benefit to you and the funds available to your charitable cause.

Now is a good moment for this one.

Consider potential Roth conversions

A third tax-saving strategy to triangulate with your year-round planning would be Roth conversions.

If the deductions from tax-loss harvesting and strategic charitable donations pushed you into a lower tax bracket, you could use this opportunity to convert taxable retirement accounts into after-tax Roth accounts.

The big takeaway here is that there are still opportunities in the final months of 2025 to implement a valuable tax strategy, such as our tax-loss harvesting example above.

There could be even bigger opportunities if you make 2026 the year that you begin year-round tax planning.

Estate planning at the end of the year

In addition to tax strategies within your portfolio, the final months of the year are a valuable window for estate planning.

The annual gift tax limit is $19,000 for an individual and $38,000 for a couple in 2025. No taxes are owed, but the gift opportunity is use-it-or-lose-it.

Some families use the end of the year to take advantage of income-shifting. A family member in a higher tax bracket uses the gift tax limits to donate assets to a family member, perhaps a young adult child, in a much lower tax bracket. Future income from that asset is taxed at the lower rate.

The key takeaway is that if your finances have even a little bit of complexity — capital gains, charitable goals, pretax retirement accounts — there are significant opportunities for tax savings.

As the complexity of your finances grows, so do the opportunities.

For many investors, a key stumbling block is the difficulty of coordinating these strategies among different professionals, a wealth adviser, a tax accountant and an estate planning attorney. That's one reason it often falls by the wayside until it's too late.

Some opportunities fade throughout the year, and most savings opportunities are completely gone by the time the tax-filing deadlines roll around.

Your taxes shouldn't be an exercise in digging up historical documents, but an exercise in active savings. There are still opportunities in 2025 taxes, and even more for 2026.

Related Content

• Year-End Retirement Tax Planning Actions if You Have $1 Million or More
• Trump's 2025 Tax Bill: What's Changing and How It Affects Your Taxes
• Seven Moves for High-Net-Worth People to Make Before End of 2025, From a Financial Planner
• New Tax Rules: Income the IRS Won't Touch in 2025
• Capital Gains Tax Rates 2025 and 2026: What You Need to Know

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

If you were to type into a search engine, "Should I talk about politics with my financial adviser?" you would find a long list of articles by advisers, and for advisers, about how best to avoid politics when discussing financial plans with clients.

I vehemently disagree with the notion that political conversations between financial advisers and clients should be sidestepped.

In fact, I would go so far as to say it is impossible for an adviser to fulfill their fiduciary duty — a legal obligation to act in your best interest — without fully knowing you as a whole person, including your political orientation.

A sound financial plan should be shaped by who you are, what you care about and the kind of world you want your money to help build. So, yes, you should get political with your adviser.

Here are three reasons why it's so important for you to do so.

1. Financial planning is deeply personal

Money isn't just about the numbers. And your financial plan isn't a spreadsheet — it's a reflection of your life: your goals, your fears, your family and your sense of purpose.

Everyone deserves the opportunity to show up as their full selves in all aspects of their lives — and that includes meetings with your financial adviser.

If your adviser brushes off this conversation, it is a red flag. You deserve a space where you can speak openly about what matters to you; whether that's climate change, income inequality, reproductive rights or local community investment.

An adviser who invites those conversations will help you create a financial strategy that feels authentic and aligned, instead of one that leaves you second-guessing whether you're compromising your values for returns.

2. Every dollar we spend has a political impact

Whether we like it or not, money is political. Every dollar you earn, invest, donate or spend influences the economy, industries and political policies in ways that either reflect your values or contradict them.

These choices aren't just abstract. They have real-world consequences for the communities we live in and the planet we want to have around for future generations.

A thoughtful financial adviser should help you understand not just where your money is going — specifically, what companies you're investing in — but also what type of direct impact those companies are having on people and the planet.

Here are some prompts you can use to initiate these conversations:

• What specific industries am I invested in, and how do they derive their profits?
• How do the companies I'm invested in stack up in terms of environmental, social, and governance (ESG) metrics, and what sources of data are you using to determine that?
• How do the companies I'm invested in contribute or detract from the United Nations' Sustainable Development Goals (SDGs)?

3. Sacrificing financial returns for ethical alignment is an outdated misconception

Some financial professionals still believe that investing in a way that prioritizes a client's values by excluding certain industries, or using ESG metrics, means sacrificing returns. That is simply not true.

In fact, companies focused on addressing the world's most urgent challenges by prioritizing people, planet and integrity are better positioned to benefit from rising consumer demand as climate change, geopolitical instability, population growth and resource scarcity intensify.

Furthermore, according to a 2025 report by Morgan Stanley, nearly 80% of global investors stated they are likely to choose a financial adviser based on sustainable investment offerings.

This reflects a broader shift toward aligning financial goals with personal values, proving that impact investing is not just a trend, but a lasting shift in how people view wealth.

A skilled, values-aligned adviser can help you invest in companies whose businesses yield both profit and purpose. It's not about choosing between doing well and doing good. It's about doing both.

Finding the right fit

It is completely appropriate to ask your financial adviser if your investments are aligned with specific values that are important to you.

If you get pushback or are sidestepped by phrases like, "You should ignore politics completely when investing," or "I can put you in an ESG mutual fund," with no further discussion about how those funds align specifically with certain issues or themes, you may want to consider whether this adviser is the right fit for you.

Do not be discouraged. There are financial advisers who are not only open to these conversations but who see them as essential to good financial planning.

You can start your search at valuesadviser.org, a directory of professionals who understand that your portfolio reflects your principles and vision for the future.

Money is powerful. When you bring your whole self — your values, your politics and your purpose — to the conversation, you give that power direction. And a good financial adviser should be right there with you, helping to turn that direction into a plan that truly fits who you are.

At the end of the day, sharing your political views with your financial adviser isn't risky. It's responsible.

Related Content

• Could Political Arguments Ruin Your Estate Plan?
• What Is ESG Investing and Is It Right for You?
• Scared About Climate Change? Change the Way You Invest
• Two Don'ts and Four Dos During Trump's Trade War
• I'm a Financial Planner: Here Are Three High-Impact Ways to Make a Difference With Your Dollars

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

While this advice is well-intended and generally useful, it turns out that following this advice blindly can sometimes make things worse than if you had done nothing at all.

Let's start with that last point about avoiding probate. Many people have heard horror stories about probate, and consequently they want to do everything they can to enable their estates to avoid it.

There are multiple ways to try to accomplish this, from establishing trusts to setting up payable-on-death (aka transfer-on-death) accounts and more.

Small estates already protected

Before bothering with any of these avoidance maneuvers, however, you should be aware that "small" estates don't need to go through probate in the first place.

Almost every state has laws that allow certain estates to bypass or at least greatly simplify probate … and the definition of "small" can be quite generous.

For example, California estates worth less than $208,850 in 2025 don't have to go through court at all (and assets like vehicles and IRAs with named beneficiaries don't even count against this limit). You can visit EstateExec.com for details by state.

Overdoing automatic transfers

If an estate doesn't qualify as "small," some people attempt to bypass probate by putting everything into assets that transfer automatically on death … but overdoing this process can leave a real mess for the survivors.

For example, if everything automatically transfers, what will be left to pay your final bills (medical, credit cards, funeral expenses and more)?

Automatically transferring everything will effectively make your estate insolvent, enabling your creditors to sue the recipients of your transfers, and leaving a real headache for the person responsible for finalizing your affairs.

One approach to handling this is to leave some of the money in accounts that don't automatically transfer … but if you leave too much, then probate will be triggered anyway.

Be careful here: While California's limit is over $200,000, South Carolina's equivalent limit is only $25,000.

Another thing to consider is that assets change in value over time, so while you may equitably set things up so one child gets a bank account that's payable on death and another gets your stock portfolio, by the time you eventually pass away, those could be at very different values.

This could result in unwanted discrepancies between the amount each person inherits.

If there are only a couple of heirs, you could list them at their desired percentages for every account, but if you have more people you want to inherit, or there are specific bequests involved, it can get a little messy.

Trust mistakes

Rather than using payable-on-death or transfer-on-death accounts, some people try to avoid probate by way of a trust.

One common misunderstanding involves a "testamentary trust," in which the will establishes a trust upon the decedent's death.

While there may be valid reasons to set up such a trust (for example, to provide for the care of a minor), you should be aware that these trusts are officially funded with assets after those assets have gone through probate … and thus don't avoid probate at all.

Another area of misunderstanding that can lead to costly mistakes concerns cost basis. When you sell an asset, you typically owe taxes on any gains you make if the selling price exceeds the original cost of the item.

So if you bought a house for $250,000 and sell it for $600,000, you will owe taxes on the $350,000 gain.

However, the U.S. tax code gives heirs a break on this tax: Many assets enjoy an automatic step-up in cost basis upon death, so if your mother bought the house, and it was worth $600,000 at the time of her death, the house would be assigned a new cost basis of $600,000.

You could turn around and sell the house for $600,000 with no taxes owed!

Unless the house had been placed in an irrevocable trust … in which case there would be no automatic cost basis step-up, and thus taxes would be due on the full $350,000 gain.

You can see how things would likely have been much better for their heirs if nothing at all had been done, and they had simply inherited the house according to normal probate processes.

Revocable trusts do generally benefit from a cost basis step-up at the time of death, and can be quite helpful — but they have their own gotchas, and in any case, you'll want to be sure that some provision has been made to pay your debts at the time of death (even if they're just your latest credit card charges), along with sufficient funds to keep everything maintained while your estate is settled and everything resolved.

The will

Of course, if you put everything (or almost everything) into assets that bypass probate, then your will won't really matter, because the will only affects things that don't automatically transfer (i.e., things subject to probate). Maybe that's OK, but it's something to take into consideration.

If not, everything will bypass probate, then a will can be quite important, especially if you have strong ideas about what you want done with your estate upon your death.

Perhaps you want to make a large charitable donation, perhaps you have certain belongings you wish to go to certain people, or perhaps you simply want to ensure that a friend or distant relative inherits a share of your estate (or that a close relation doesn't!).

However, if you're not careful, you can end up with a flawed will that can be challenged and overturned in court. Without very careful wording, for example, it can be difficult to "cut someone out of your will."

For example, many states have laws that protect a surviving spouse from such situations, and upon request from such a spouse, the court will simply overrule your will. In another example, a child of a Louisiana decedent is usually entitled to a significant portion of the estate, regardless of almost anything the will may say.

For these reasons, if you intend to do anything "unusual" in your will, it makes sense to have an experienced lawyer help you draft it. And then be sure an interested party will have access to the will upon your death … it doesn't do any good to have a will if no one can find it when the time comes.

Intestate estates

On the other hand, if you're not going to do anything unusual in your will, you may wonder why you should even bother in the first place.

After all, every state has laws that require your estate to go to your closest relations (i.e., spouse, children, etc.) if there is no will, and no one should feel slighted if the estate goes to the "normal" distribution percentages.

In fact, settling an estate can be even easier without a will. If there is no will, no one needs to prove that the signature on the will was yours, and that you were in your sound mind and not under duress when you signed it.

If there is no will, distributions can be made directly to the "heirs-at-law" (your closest relations as defined by law), but if there is a will, the heirs-at-law must be officially notified so they have a chance to contest the will. And so on.

Lawyers generally cringe when they hear someone saying that settling an estate can be easier without a will, because it's just accepted wisdom that everyone should have a will.

We're certainly not recommending that you avoid writing a will. If you care about the outcome, it's probably a good thing to do.

We're just pointing out that, like everything in life, there are pros and cons, and you should decide what's best for you … and that for better or worse, the majority of people opt not to bother in the end.

Estate planning vs estate settlement

While all aspects of estate planning are optional, estate settlement (the process of winding up the decedent's affairs) is mandatory.

And no matter what plans have been made, there are still myriad things that must be done after the death, even if everything has been set to transfer "automatically" (for example, various federal and local agencies must be notified, the residence must be cleaned out, debts resolved and more).

If your goal is to make things easy on your surviving family, one other thing to consider is estate settlement preparation, which doesn't involve legal documents or anything formal: just pulling together some basic information like a list of major assets, the location of keys, how to contact the heirs, etc.

Although often overlooked, settlement preparation is probably the easiest aspect of estate planning. Even something as simple as a list of financial accounts can transform the settlement process from a complex investigation into a straightforward task.

You can just list things in a basic spreadsheet, you can use a purpose-built product like The NokBox, or you can even use something like EstateExec, which will also automatically guide your executor through the settlement when the time comes. (Note: I am the founder and CEO of EstateExec.)

Summary

Traditional estate planning can be helpful, especially for larger estates, but it can also backfire, so if you are going to engage in it, it is best to get advice and help from an experienced professional.

And if the estate is on the smaller side, one of the most important things you can do is to ensure your executor will have some basic information about your estate when the time comes.

Related Content

• Simple Ways to Make Your Executor's Job Less of a Pain
• Probate: The Terrible, Horrible, No Good, Very Bad Side of Estate Planning
• Protect Your Family's Future: Avoid These 12 Common Estate Planning Mistakes
• An Expert's Guide to the Estate Planning Documents Everyone Needs
• Estate Planning Checklist: 13 Smart Moves

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

There's about to be a period in which the largest wealth transfer in history takes place, called the Great Wealth Transfer.

By 2048, an estimated $124 trillion, according to Cerulli Associates, is expected to be passed down from Boomers to younger generations.

How do you deal with assets that high when transferring them to heirs and receiving them as an heir?

It's a complex situation in which there's no cookie-cutter approach, but there are things to know about transferring wealth that could help you understand how to best position yourself to receive that money, how it could affect your financial situation and, ultimately, how to weave it into your financial plan.

How to approach the transfer of ownership of assets

The reality is that not everyone wants their children to know about their financial situation or their distribution of assets in the same way.

Many of those fears are for good reason. Studies show that 70% of families lose their wealth by the second generation, and an astonishing 90% lose it by the third generation.

A variety of factors can contribute to this, including taxes, frivolous spending and a lack of understanding of how to handle transferred assets.

For example, if you inherit an IRA, you might think you must pay all taxes on the account now instead of stretching it over 10 years, as the rules currently state.

Instead, you can apply strategies to better utilize or combine that money to allow yourself to retire earlier than you thought possible.

In some cases, an effective wealth transfer can even accelerate a retirement timeline. You might be able to strategically use some rules that enable you to liquidate assets to bridge that gap.

For example, let's say you're in a position to retire early at age 54, but you can't touch your 401(k) without penalty until age 59½, whereas if you worked until age 55, you can, thanks to the so-called Rule of 55. If you inherit assets, it could free you to avoid touching those retirement assets.

Take the funds that you're forced to take from an inheritance to bridge the gap until you get to a point where you can access retirement money.

Otherwise, you'd have had to work five more years just to be able to access what you put into a retirement plan. Here are the three steps that can help to see you and your heirs through a transfer of wealth:

Step 1: Know what you're inheriting and what buckets you receive

The first step is knowing what you're inheriting and what buckets you've received. Sometimes when people inherit money, they think they're going to have a huge tax burden.

But most of the time, if you do it strategically, you won't have a lot of taxes due at one time, based on the current rules on a stepped-up cost basis.

If you inherit a home and sell it immediately, there shouldn't be any taxes. The same is true if you inherit a stock portfolio. The tax basis will update to the date-of-death value.

Depending on the process, you can have a bucket in which assets aren't taxable but available to do such things as help you pay off your mortgage, lowering the amount of money you need monthly. This could put you in a window in which retirement is a possibility.

When it comes to retirement, you must think about your cash flow and how you fill that bucket. What's going to be available for emergencies? What kind of growth vehicle am I going to need for inflation? Depending on what you inherit, that could fill a bucket that you don't currently have today.

If it's a situation in which you feel good about your pension and Social Security income but don't have enough flexibility for emergencies, maybe those assets will bridge that gap. You could have a great situation today, but you are worried about longevity. You could position assets for long-term growth potential.

It's about trying to figure out how to weave that strategy into what you're already doing, because we tell people inherited money is a lot like lottery money.

If you don't know you're going to get it or what you plan to do with it, the money tends to disappear very quickly.

Make sure you're strategic to a point, but don't count money before you have it. I think everybody would like their parents to finish well and have enough money for long-term care and other things that could put a dent in the expected inheritance that you get, especially if you're dividing it between siblings.

Never make tactical decisions before you have money, but it's good to make strategic planning choices or have awareness so you're prepared when you do receive assets.

Step 2: Be as efficient as possible

If you want to transfer wealth as efficiently as possible, there are several actionable steps to make sure your assets are accurate and structured according to your preference.

This will ensure as many of your assets go through beneficiary designations as possible and you aren't waiting on a probate timeline, which helps reduce the risk of someone thinking they're entitled to money they aren't.

Have basic estate planning documents in place so you can end your life well, but also make sure anything that doesn't have a beneficiary's name attached to it is dealt with appropriately.

This time is also about education and having conversations with your children so they're not blindsided. Leave your heirs with a plan, not a puzzle. Determine who needs to have a voice in the conversation and who needs to have a vote in the conversation.

If you want to handle the wealth-transfer process right, communication is key with the next generation.

For example, let's say you have three siblings; two are in good financial shape, but the third has hit hard times. Logically, it would make sense to shift more of the estate in their favor.

But if there's no communication and they see the documents, they might think their parents loved that sibling more than them.

People attach a lot of psychology to money decisions, especially later in life. The more communication you have and get buy-in from the kids, the better it will be for everyone. Don't ruin your legacy through a lack of communication.

Step 3: Be strategic in your gifting

In the same way the recipient must be strategic in how they receive money, parents should be strategic in how they give or leave money.

If they're in a position in which they're financially able, they could gift funds annually while still living, passing money to their heirs that doesn't have the same restrictions or taxation.

Remember to think about the tax buckets. For example, suppose half your money is in a house and the other half is in a retirement account. You want half your money to go to charity and the other half to your kids.

In this case, you'd want to gift the house to the kids, because they would get more and the charity would get more if you gift the entire retirement account.

It might sound simple, but if you switch those, the whole estate is going to be smaller and less impactful simply because you didn't gift from the right bucket to the right places. Strategy matters.

This could make Roth conversions more valuable because inherited Roth funds are the only funds you can receive that have a tax-free life after the person who funded the Roth.

Try to use that as motivation to say, "If I know I'm never going to use that money and I want to try and maximize its impact, then maybe it makes sense for me to start paying taxes on this money for the benefit of kids or grandkids to be able to have a tax-free runway."

Some clients I work with recognize the impact of Roth conversions on their situation, but when I ask about their parents, they tell me they're 89 years old, living on Social Security and are forced to take money out every year.

Because of that, their total income is probably not a lot, especially compared with their heirs.

Could it make sense for the parents to convert so that the money the children receive will then be able to grow tax-free during their lifetime and retirement years?

It's easy to get into your upper 80s and not realize how beneficial a Roth conversion is when you're just pulling whatever the government makes you take out since required minimum distributions (RMDs) started for you almost 20 years ago.

It's about being strategic with what you want to have happen and how you can leverage the decisions that you can make today and maximize the impact.

Related Content

• This Is How You Can Guide Your Heirs Through the Great Wealth Transfer
• You've Built Your Wealth, Now Make Sure Your Family Keeps It
• Great Wealth Transfer: How Families Can Get on the Same Page
• Wealth Transfer Is About More Than Just Money
• Six Ways to Make Talking With Family About Estate Planning Easier

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Even a small step now — sharing your thoughts on aging, care or estate plans — could help prevent confusion, conflict or stress down the road.

Many people find these conversations challenging, and understandably so. They touch on mortality, money and independence.

Kiplinger's Adviser Intel, formerly known as Building Wealth, is a curated network of trusted financial professionals who share expert insights on wealth building and preservation. Contributors, including fiduciary financial planners, wealth managers, CEOs and attorneys, provide actionable advice about retirement planning, estate planning, tax strategies and more. Experts are invited to contribute and do not pay to be included, so you can trust their advice is honest and valuable.

Yet, in my experience with clients, the greatest gift you can give isn't always measured in dollars; it's the clarity and peace of mind that come from a well-communicated plan.

Whether you are the matriarch or patriarch of the family, or the adult child looking to support aging parents, here is how to approach these conversations this season.

For the older generation: Stewardship and clarity

If you are the one who built or stewarded the family's wealth, you are likely focused on two main objectives: maintaining your own comfort and easing future responsibilities for your children. Clear communication supports both.

Long-term care and living wills

Talking about long-term care doesn't have to be a technical discussion about insurance policies. It can be as simple as expressing a wish: "I want to make sure my health care preferences are clear if I can't speak for myself."

From there, you can share whether you would prefer to age at home or elsewhere and confirm that your power of attorney and health directive documents are current. This isn't about giving rigid instructions — it's about ensuring your family isn't left guessing during a crisis.

Estate plans and legacy

A smooth, organized transition is one of the most meaningful legacies you can leave. You don't need to get into specific dollar figures at the dinner table. Instead, focus on the logistics:

• Where are the key documents kept?
• Who are your attorney, tax professional and wealth manager?
• What is the general structure of the plan?

If your plan involves unequal distributions, offering brief context now can spare significant tension later.

Family values and philanthropy

If discussing assets feels too heavy, try starting with values. Bringing your family into your charitable giving can be a gentle way to discuss legacy. Asking which causes matter to them turns the conversation toward shared purpose rather than inheritance.

For adult children: Curiosity and respect

Adult children often want to support their parents but fear overstepping boundaries. The key is approaching these topics with curiosity and respect, rather than demands.

Asking about preparedness

You would feel better knowing where your parents' key documents are and who to contact if something happens. Frame the question practically, not intrusively.

Looking for expert tips to grow and preserve your wealth? Sign up for Adviser Intel (formerly known as Building Wealth), our free, twice-weekly newsletter.

Understand what key professionals are involved — the attorney, wealth manager, accountant and anyone else supporting the family. Identifying these individuals is not only part of maintaining an "orderly estate," but it also helps reduce the risk of miscommunication.

Crucially, it can help prevent your parents from becoming victims of financial fraud and hacking by ensuring there is a trusted team watching over their affairs.

Understanding the care plan

If your parents have said they want to age in place, it helps to ask what that means in practice. How do they imagine the family coordinating support?

Discussing this now keeps everyone aligned and avoids accidental misunderstandings later.

Aligning on educational support

Holidays can also be a good time to talk about help for the grandchildren's education. Asking whether they would like to contribute to 529 plans — or use another approach — keeps things coordinated and tax-efficient.

Conversation starters

If you aren't sure how to break the ice, try one of these openers.

Parents could say:

• "We're not getting any younger, and I want to make sure we're on the same page about elder care. We'd like you to be the point person for our care when we're older. Is that something you'd be open to?"
• "At some point next year, I'd like you to sit down with our wealth manager and attorney to understand what to expect when I'm gone. Can we get something on the calendar?"

Adult children could say:

• "I'm not sure how to think about planning for the children's education. Is that something you'd be willing to contribute to during your lifetime instead of leaving it up to the will?"
• "If you got hit by a bus tomorrow, where is everything saved? Do you have a doomsday file on your computer?"

Putting it all together

Not every topic will be resolved over a single holiday dinner — and that's okay. The goal is simply to begin.

By opening the door to these conversations, your family can create a shared commitment to clarity, stability and long-term well-being. That is a gift that lasts far beyond the holiday season.

Related Content

• Your Estate Plan Isn't 'Done' Until You've Completed These Five Steps, From an Estate Planning Attorney
• What Would You Like to Leave Behind? A Financial Planner's Guide to Family Wealth Discussions
• Resist the Taboo: Talk to Your Kids About Family Wealth
• Prepare Your Family for the Financial and Legal Aftermath of Your Death
• You Don't Want It, But You Should Plan for It Anyway: An Expert Guide to Long-Term Care

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

That's the power of a private annuity sale — an advanced, yet simple and elegant estate tax-mitigation strategy used by sophisticated families and their advisers.

What is a private annuity sale?

A private annuity sale is a transaction in which you transfer an asset — such as a closely held business interest, investment real estate or a concentrated securities position — to an irrevocable dynasty trust in exchange for the trust's unsecured promise to pay you a fixed annuity for the rest of your life.

Kiplinger's Adviser Intel, formerly known as Building Wealth, is a curated network of trusted financial professionals who share expert insights on wealth building and preservation. Contributors, including fiduciary financial planners, wealth managers, CEOs and attorneys, provide actionable advice about retirement planning, estate planning, tax strategies and more. Experts are invited to contribute and do not pay to be included, so you can trust their advice is honest and valuable.

There's no commercial insurer involved; it's a private arrangement, priced using actuarial life expectancy and an appropriate interest rate.

How it works

You sell the asset at its fair market value. In return, the dynasty trust commits to pay you a lifetime stream of payments calculated to be actuarially equivalent to that value, taking into account your age and prevailing rates.

From that point, all future appreciation accrues to the trust for your family. Because you receive only an unsecured promise to pay rather than retaining the asset, the transferred property and its post-sale growth are removed from your taxable estate, if properly structured and respected.

Why it can reduce estate taxes

Estate taxes apply to what you own at death. With a private annuity, you no longer own the transferred asset. You hold an annuity promise that generally has no value at death because payments cease when you do.

The result is that high-growth assets and future appreciation sit outside your estate, while you retain lifetime income. If the asset outperforms the assumptions used to price the annuity, that upside accrues to heirs without additional estate tax.

Here's an illustrative example. Assume you own $10 million of rapidly appreciating company stock. You sell it to a dynasty trust in exchange for a lifetime annuity priced at fair market value.

If you live to your actuarial life expectancy, you receive the economic equivalent of $10 million over time. If the stock grows to $16 million inside the trust, the $6 million of growth is outside your taxable estate, because you no longer own the shares.

Income and income tax features

The annuity provides predictable lifetime cash flow. Depending on basis and structure, each payment might be characterized among gain, return of basis and interest for income tax purposes.

Looking for expert tips to grow and preserve your wealth? Sign up for Adviser Intel (formerly known as Building Wealth), our free, twice-weekly newsletter.

When the buyer is a grantor trust, income tax treatment can be streamlined in certain circumstances, aligning cash flow with wealth transfer goals. Careful modeling and coordination are essential.

Key considerations and risks

The trust must be financially able to make payments; the promise is unsecured. The annuity must be properly priced and documented to avoid gift or valuation challenges.

Longevity risk is inherent: A longer life means more payments to you; a shorter life shifts more value to heirs. Success depends on rigorous legal, tax, valuation and actuarial execution.

When it's a fit and next steps

A private annuity sale can be compelling if you hold high-growth assets, want lifetime income and aim to minimize estate taxes.

Work with a team of experienced estate planning lawyers, valuation experts and tax experts to structure, document and fund the transaction correctly.

Related Content

• Is An Annuity Your Missing Retirement Piece?
• How Much Income Can You Get From an Annuity? An Annuities Expert Gets Specific
• Got Assets? Attorney Explains How to Protect Them From Greedy Lawsuits
• Is Your Cryptocurrency Safe? How to Shield Digital Assets
• New SALT Cap Deduction: Unlock Massive Tax Savings With Non-Grantor Trusts

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Most people think of retirement in two stages: accumulation, when you save and invest, and distribution, when you start spending. But there's a crucial middle phase that rarely gets the attention it deserves — the Critical 15.

These five years before you stop working and the first 10 after often determine how confident and comfortable you'll feel for the rest of your life.

It's the transition period in which paychecks end, withdrawals begin, and every decision carries extra weight.

Kiplinger's Adviser Intel, formerly known as Building Wealth, is a curated network of trusted financial professionals who share expert insights on wealth building and preservation. Contributors, including fiduciary financial planners, wealth managers, CEOs and attorneys, provide actionable advice about retirement planning, estate planning, tax strategies and more. Experts are invited to contribute and do not pay to be included, so you can trust their advice is honest and valuable.

Many retirees enter this phase unprepared, caught off guard by unexpected tax bills, Medicare surcharges or market downturns that hit just as they start drawing income.

How do you turn awareness into action? The first step in navigating the Critical 15 is creating a plan for a steady income so you can have control, flexibility and peace of mind no matter what the markets do.

Income planning during the Critical 15

The first step is learning how to create your own "retirement paycheck". Separate essentials (housing, health care, food) from discretionary expenses (travel, hobbies, gifts).

Your budget should work like a dashboard, giving you a clear view of your spending and helping you make adjustments, not a diet that makes you feel restricted.

Once you understand what you'll need to spend, the next step is deciding where that money should come from and when. The timing and source of your withdrawals can make a major difference in how long your savings last and how much you pay in taxes.

Social Security timing. The right time to claim isn't just about the biggest check, it's about how your benefits interact with taxes and investment withdrawals. In some cases, filing earlier can help preserve investments during a market downturn by reducing the need to sell assets at low prices.

Account sequencing. The order you draw from pretax, Roth or brokerage accounts directly affects how long your savings last. Instead of spending down one type of account first, it can be smart to blend withdrawals to help keep your taxable income consistent over time.

For example, you might pull from Roth accounts in high-income years or during market downturns and use taxable funds when gains can be realized at lower rates. The goal is to smooth your tax bill over the years rather than face costly surprises later.

Spending guardrails. Instead of sticking to a rigid 4% rule, build flexibility into your plan. Set spending thresholds that tell you when to adjust. If markets rise and your portfolio grows, you can safely increase withdrawals.

If markets drop, scale back slightly to give your investments time to recover. This approach keeps your plan sustainable without forcing unnecessary sacrifice when times are good or panic when they're not.

Retirement tax planning during the Critical 15

Income planning doesn't stop once you've figured out where the money will come from — it's just the start.

The real opportunity lies in how you manage taxes on that income, especially during the Critical 15 when small decisions compound over time. For most retirees, this is the last and best window to shape your lifetime tax bill.

Several moving parts make this period especially complex:

Social Security and taxes. Up to 85% of your benefits can be taxable, depending on how much other income you earn. Coordinating withdrawals and benefit timing helps you avoid unnecessary tax on your Social Security.

Medicare premiums. Higher income can trigger IRMAA surcharges, which are based on your tax return from two years earlier. Managing income levels in your early retirement years can prevent these surprise costs.

Account mix. Many retirees have most of their savings in pre-tax accounts, which can backfire when required minimum distributions (RMDs) begin. Building tax diversification early — across taxable, pre-tax and Roth accounts — gives you more control of your tax bracket later.

Heirs' taxes. A surviving spouse often ends up in a higher tax bracket filing as a single taxpayer, and non-spouse heirs must now empty inherited IRAs within 10 years. Thoughtful planning can reduce that future burden.

The most effective moves in this phase often include Roth conversions, in which you gradually shift money from pretax to Roth accounts to create tax-free income later, and tax diversification, blending withdrawals across account types to keep your effective tax rate steady over time.

Looking for expert tips to grow and preserve your wealth? Sign up for Adviser Intel (formerly known as Building Wealth), our free, twice-weekly newsletter.

These steps might not make a big splash in a single year, but over a 20- or 30-year retirement, they can save hundreds of thousands in taxes and add years of longevity to your portfolio.

Investment planning during the Critical 15

The Critical 15 also brings one of retirement's biggest risks: sequence of returns — poor market performance early on that permanently damages your portfolio. Selling during downturns locks in losses and can derail even strong savers.

To protect yourself:

• Build a "war chest." Hold three to five years of essential expenses in stable assets such as Treasuries or short-term bonds.
• Match risk to timeline. Keep near-term funds conservative, but let long-term money keep growing.
• Stick to your plan. Reacting to headlines often hurts more than it helps. Let your strategy (not emotion) drive decisions.

Key steps to take during the Critical 15

After you've looked at income, taxes and investments, it's time to bring the pieces together. A checklist highlights the most important actions to take and revisit to stay organized and on track through this critical transition.

• Start early. Begin at least three years before your Critical 15 phase is due to begin. This will allow time to align your investments, taxes and income strategy.
• Build a flexible income plan. Design a spending approach that adjusts for markets, health costs or lifestyle shifts — think dashboard, not diet.
• Be proactive with taxes. Use Roth conversions, smart withdrawal sequencing and charitable giving to reduce your lifetime tax bill.
• Create a safety reserve. Keep several years of spending in low-volatility assets to weather market declines without panic selling.
• Plan for health care. Understand how income affects Medicare premiums and explore options such as health savings accounts (HSAs) or supplemental insurance.
• Revisit regularly. Update your withdrawal plan, tax projections and investment mix at least once a year — or sooner if life changes.

The Critical 15 isn't just another planning concept — it's the phase in which everything you've built finally comes together.

By coordinating income, taxes, investments and health care during this window, you gain flexibility and confidence for the years ahead.

Related Content

• A 10-Year Retirement Planning Checklist
• The 'Rule of 25' for Retirement Planning
• Retirement Income Strategies for the Long Haul
• I'm a Financial Planner: Here Are Five Phases of Retirement Planning You Have to Get Right
• How to Create Retirement Income That's Driven by Cash Flow

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Baby Boomers and the Silent Generation are transferring assets at a pace never before seen. Cerulli Associates estimates that about $84 trillion will change hands in the U.S. through 2045, with $72 trillion flowing to heirs and nearly $12 trillion going to charity.

Numbers this large can dominate the headlines, but the real story is about preparation and protection. Families who believe they've completed their estate plans once the technicalities, such as documents, valuations and tax strategies are in place, might be overlooking critical risks.

Kiplinger's Adviser Intel, formerly known as Building Wealth, is a curated network of trusted financial professionals who share expert insights on wealth building and preservation. Contributors, including fiduciary financial planners, wealth managers, CEOs and attorneys, provide actionable advice about retirement planning, estate planning, tax strategies and more. Experts are invited to contribute and do not pay to be included, so you can trust their advice is honest and valuable.

Without further steps, heirs might face confusion, conflict or costly mistakes. Those who go further to invest in communication, education and shared purpose might avoid common pitfalls and turn inheritance into a lasting legacy.

Start while you're living

One of the most powerful ways to protect family wealth is to prepare heirs before they inherit. Families who wait until death to hand down responsibility often leave heirs without the experience or judgment needed to manage wealth wisely.

By contrast, sharing wealth — and decision-making — during your lifetime creates a controlled environment for learning, growth and risk reduction.

Make lifetime gifts part of your wealth plan. Instead of waiting for a full inheritance, gifting a manageable amount of cash or stock allows heirs to practice stewardship.

In family businesses, small equity stakes help the next generation learn operational and governance responsibilities, reducing the risk of disruption later.

Tie transfers to life milestones. Linking wealth to achievements such as graduating college, landing a first job or completing financial training provides natural opportunities to build maturity.

These standards help prevent premature or mismanaged transfers.

Involve heirs in philanthropic decisions early. Giving younger family members the responsibility to allocate charitable funds teaches disciplined decision-making and values alignment, reducing the risk of misaligned giving or disconnection from purpose.

By integrating these practices, families can help ensure that heirs have tested their decision-making, experienced consequences in a safe setting and built the confidence needed to manage larger sums — all before the full estate is transferred.

Prevent conflict with clear, updated plans

Having legal documents in place is essential — but not sufficient. Failure to keep them updated or to clearly communicate plans to heirs is one of the most common causes of estate disputes, legal delays and unintended outcomes.

Engage wealth advisers early. Working with legal, tax, and financial professionals ahead of time allows for thoughtful, iterative planning — avoiding rushed decisions in crisis moments.

Update documents after major life or financial events. A marriage, divorce, new grandchild or business change can render old plans obsolete, leading to misallocations or disputes. Regular reviews help keep intentions aligned with current reality.

Provide heirs with a clear inventory and instructions. Without access to key documents or understanding of how to manage complex assets such as real estate or private businesses, heirs can be left vulnerable to costly mistakes, delays or litigation.

Clarity eliminates ambiguity. When heirs understand the plan and where to find everything, transitions are smoother, legal risks are minimized and conflict is less likely to arise.

Break the silence around money

Many families avoid talking about money, hoping to protect harmony and keep heirs motivated to build their own successes. But silence can lead to confusion, mistrust and division.

Open, structured communication is one of the most effective ways to reduce the risk of future conflict.

Schedule regular family meetings. These create a cadence of transparency and engagement. Reviewing investments, charitable goals or business strategies together keeps the family aligned and prevents future surprises.

Create a mission statement or legacy letter. Explaining the "why" behind the plan gives heirs context and a shared philosophy, helping them make decisions that honor the family's intentions and avoiding future misinterpretation or misalignment.

Share access to key documents and digital records. When everything is centralized and accessible, it reduces stress and confusion during transitions and lowers the risk of costly delays or missed opportunities.

These communication habits build trust, reduce uncertainty and ensure that wealth transfers happen in the context of shared understanding and purpose — not assumptions and guesswork.

Financial literacy is a safeguard, not a luxury. Even with a clear plan and open dialogue, the technical complexity of wealth management remains a major risk area.

Looking for expert tips to grow and preserve your wealth? Sign up for Adviser Intel (formerly known as Building Wealth), our free, twice-weekly newsletter.

Without training, heirs might feel overwhelmed or make irreversible mistakes — jeopardizing the legacy.

Provide formal financial education. Courses or workshops on investing, taxes and estate planning give heirs the tools they need to make informed decisions—and avoid costly errors.

Encourage heirs to shadow advisers and take on responsibilities. Involving them in investment reviews or charitable evaluations creates real-world experience and gradually builds competence, reducing the risk of poor judgment later.

Teach liquidity and diversification. Understanding the difference between liquid and illiquid assets helps heirs avoid scenarios in which they must sell under pressure or make short-sighted decisions in times of need.

Proactive financial education ensures that heirs are not only confident but also capable, reducing the risk that inherited wealth is mismanaged or quickly depleted.

Align wealth with values and impact

Families that treat wealth as a tool for impact — rather than just a resource to preserve — tend to see greater alignment across generations and fewer internal conflicts.

Involve heirs in grant-making. This teaches responsible capital allocation and connects financial decisions to deeper values, reducing the risk of detachment or aimlessness.

Use family foundations or donor-advised funds as training grounds. Assigning real roles and responsibilities builds skills in governance, collaboration, and administration, all of which may help reduce the risk of dysfunction.

Encourage heirs to define how wealth should serve others. When each generation articulates their vision of impact, it ensures the legacy remains relevant and grounded and can help to avoid drift or disconnection.

Philanthropy isn't just an outlet for generosity — it's also a powerful mechanism for teaching responsibility and fostering unity, while shielding the family from the risk of purposeless wealth.

The real measure of success is preparedness

The Great Wealth Transfer will shape the global economy, but for families, its effects are deeply personal. The greatest risk is not taxes, markets or inflation. It is unprepared heirs.

Success will not be measured solely in account balances but in how well heirs uphold values, strengthen relationships and manage responsibilities.

Families that begin early, communicate clearly, maintain updated plans and invest in financial education are far more likely to avoid common pitfalls and preserve their legacy for generations to come.

The money will move either way. The outcome — whether it becomes lasting wealth or fleeting fortune — depends on how well families prepare.

Related Content

• From Wills to Wishes: An Expert Guide to Your Estate Planning Playbook
• Great Wealth Transfer: How Families Can Get on the Same Page
• An Expert's Guide to the Estate Planning Documents Everyone Needs
• How to Organize Your Financial Life (and Paperwork)
• How to Decide How Much Money You Can Afford to Gift in Your Lifetime

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Answer: Reentering the dating world can be daunting when you’ve been off the market for quite some time. But you may reach a point when you’re ready to get back out there — perhaps once your grown kids are settled into lives of their own, or once you find yourself inching closer to retirement and wanting companionship.

The good news is that you have several tools at your disposal for finding a partner — dating apps (yes, we know they can be frustrating), community groups and clubs, and even your own social network. But what if you’ve recently started dating and the topic of money keeps coming up?

If you’re a person of means, you may be concerned that the people you’re dating are simply looking for someone to fund their lifestyle. If you’re not particularly wealthy, you may worry that it could be a barrier.

It’s important to distinguish between talking about money to a healthy degree and having it be your date's priority. It’s also important to know how to protect yourself financially should a relationship of yours progress.

There’s nothing wrong with due diligence

A first date is definitely not the right time to ask someone about their finances. But Jason Lee, Founder of The LoveTrack App, says that once you start seeing someone more regularly, talking about money isn’t necessarily a red flag. Rather, it may be someone doing their due diligence.

“If they're looking to see if you're stable, able to commit to important processes like saving, and have good financial habits, that's a fair question and is certainly something worth knowing,” Lee says. “However, if they're interested in how you can spoil them or what kind of gifts you can give them, that's a huge red flag."

Once a relationship of yours progresses, Lee recommends not shying away from money talks.

“Be open to discussing spending habits and how they make financial decisions,” he says, as it could help set the stage for a healthy relationship — or help you avoid someone with whom you’re not financially compatible.

Know the red flags

There’s a difference between talking about money to ensure that you and a partner are on the same page and making money the defining factor in your relationship.

Kelli Smith, Director, Financial Planning at Edelman Financial Engines, says that no matter how much money you make or have, the same red flags tend to apply in a dating situation.

Be wary, says Smith, of a potential partner who “pressures you into quick financial commitments, avoids open money conversations, or shows little interest in shared financial values.”

You should be especially careful if someone you start dating isn’t shy about asking for money or financial help, or pressures you to give them access to your financial accounts.

Kelsey Simasko, attorney at Simasko Law, says you should spend money on a new partner cautiously.

“Ask yourself if you’re spending money on them because you want to, or because you feel like it is required,” she says.

Protect yourself if things go further

You may reach a point in a dating relationship where you’re ready to make a longer-term commitment. By that point, you’ve hopefully come to the realization that your partner is more interested in you than your wallet. But even so, it’s a good idea to take steps to protect your financial interests.

"Maintaining separate accounts, avoiding shared passwords or assets early on, and considering a prenuptial agreement if the relationship becomes serious are all responsible steps,” says Smith. “These steps aren’t about having mistrust with your partner. They’re about protecting what you’ve built and ensuring you have the flexibility to make decisions that align with your long-term goals.”

Simasko, meanwhile, says that even if you're ready to make a big commitment, it's still okay to keep finances separate if you’re more comfortable doing that. Alternatively, you could combine some finances but not all of them.

“You do not have to commingle everything,” she insists.

Simasko also says that if you're considering a marriage, don't assume that a prenuptial agreement is all you need to protect yourself.

“Prenups are great, but they only protect in the case of a divorce, not death,” she explains.

If you’re looking at getting married later in life, it’s important, says Simasko, to do proper estate planning. That means deciding who you wish to inherit your assets upon your passing.

“Estate planning is the difference between passing away and leaving everything to your children, or whoever you want to get the funds, versus not estate planning and then a fair amount of funds is usually required to go to the surviving spouse,” she explains.

You may want to work with an estate planning attorney to create a will or trust that outlines your wishes explicitly. As is the case with a prenup, this doesn’t mean you don’t love or trust your partner. It simply means you’re looking to protect your financial interests and take care of your family the way you always intended.

Read More

• Dating Again? Nine Rules for Older Singles
• I Retired at 65 With $7.8 Million and Feel Like I Over-Saved. My 40-Something Son Is on the Same Path. Should I Tell Him to Reconsider?
• The Rule of Two Lives in Retirement
• 5 Financial Red Flags in Relationships

For years, financial success has been measured by numbers, such as beating market benchmarks and increasing net worth.

But with tax laws now clarified under the One Big Beautiful Bill Act (OBBB), inflation still weighing down portfolios and family priorities evolving, people are asking a different question: Do our financial plans support the lives we want to live?

Kiplinger's Adviser Intel, formerly known as Building Wealth, is a curated network of trusted financial professionals who share expert insights on wealth building and preservation. Contributors, including fiduciary financial planners, wealth managers, CEOs and attorneys, provide actionable advice about retirement planning, estate planning, tax strategies and more. Experts are invited to contribute and do not pay to be included, so you can trust their advice is honest and valuable.

This moment feels like a turning point. The estate tax exemption is set at $15 million for 2026, removing years of what-if uncertainty.

But clarity on the law has not erased other pressures. Rising costs, unclear borrowing rates and political tensions all make it harder to feel secure about the future.

Add to that generational differences, with some families leaning on tech-driven DIY investing and others relying on long-term adviser relationships, and it's clear the definition of financial success is shifting.

When wealth aligns with life

Financial success goes beyond tax efficiency and investment performance. It's about how money supports a meaningful life. I see this most clearly with families who have complex goals that can't be solved by numbers alone.

I've recently worked with a couple in their second marriage, each with children from prior relationships. Their concern was that their estate could spark conflict, with assets unintentionally flowing to the wrong heirs, or family members feeling shortchanged.

Together, we built a plan with trusts that provided for both spouses during their lifetimes, while ensuring assets ultimately passed to the intended children and grandchildren.

The design offered more than tax benefits; it gave both spouses the confidence that their legacy would reflect their wishes and preserve family harmony long after they were gone.

That peace of mind is often what clients are truly seeking. Many accumulate wealth only to discover that bigger account balances don't bring greater fulfillment.

The turning point usually comes when they pause to ask: What is this money really for? For some, it's creating memorable experiences with family. For others, it's supporting charities or investing in future generations.

When wealth is aligned with purpose, the plan becomes more than financial; it becomes personal.

Money can also strain relationships. Spouses might have different money "scripts," shaped by their upbringing. Children might see their parents' assets as an inheritance rather than resources meant to support the parents' own goals.

Looking for expert tips to grow and preserve your wealth? Sign up for Adviser Intel (formerly known as Building Wealth), our free, twice-weekly newsletter.

Open conversations, whether around the dinner table or in structured family meetings, can shift that dynamic. By explaining why decisions are being made, families reduce uncertainty and build understanding, even if every detail is not disclosed.

These strains don't stop at family dynamics. Financial stress often spills over into physical and emotional health. Those who overwork to accumulate more, overspend to keep up appearances or stress about markets often find their financial choices eroding their physical and emotional well-being.

By aligning spending with values, such as education, travel, philanthropy or simply enjoying time together, you can create financial stability and a richer quality of life.

Practical steps for 2026

Redefining financial success requires both reflection and action. The following steps can bring clarity to your goals, create alignment with your family and allow you to move into 2026 with a plan that feels both purposeful and achievable.

Step No. 1: Clarify your values. Write down the principles that guide your decisions, whether family security, philanthropy, lifestyle goals or something else. This list becomes the filter for every financial choice.

Step No. 2: Prioritize your objectives. Separate "must haves" from "nice to haves." Paying for children's education might be essential, while a vacation home is a bonus. Ranking goals prevents competing priorities from derailing the plan.

Step No. 3: Define your legacy. Look beyond the question of who will inherit your assets and consider how you want to be remembered. Do you want to create traditions, support charities or establish trusts that last beyond your lifetime?

Step No. 4: Engage a holistic adviser. Look for an adviser who goes beyond investment performance to address taxes, estate planning, insurance and family dynamics. Ask how they incorporate well-being and values into the planning process.

Step No. 5: Schedule a family conversation. Bring your spouse or heirs into the discussion. Even a simple conversation about what matters most can ease tensions and set expectations for the future.

Step No. 6: Check alignment annually. At least once a year, revisit your goals and compare them with your financial plan. Life events, tax law changes or shifting priorities may require adjustments.

Step No. 7: Watch for red flags. Warning signs include strained family conversations, stress that undermines health or an inability to answer the question, "What is this money for?"

These steps don't require perfection, but they do require intentionality. The goal is not to build the largest portfolio, but to create a financial life that supports your well-being today and in the years ahead.

Wealth alone doesn't equal success. As 2026 begins, redefine financial success in broader terms: well-being, family harmony, health and legacy.

By aligning financial strategies with priorities, wealth can become a tool for building a more meaningful life.

Related Content

• The 'Go Live Your Life' Rule of Retirement Spending
• Why More Americans Are Redefining Retirement, Just Like I Did
• Financial Planning's Paradox: Balancing Riches and True Wealth
• For a Richer Retirement, Follow These Five Golden Rules
• Are You Retired? Here's How to Drop the Guilt and Spend Your Nest Egg

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

As a lifelong baseball fan, I have always appreciated knowing that certain players — Hank Aaron, Cal Ripken and Joe DiMaggio, for example — held some amazing records.

But as the years have gone on, and more baseball data points get thrown around with new names, I often find myself nodding along without really knowing what all of the new sabermetrics mean.

Many of us hit a point in our lives when we've heard about topics and phrases so many times that we believe we should understand what they mean, but we don't — and we're a little embarrassed.

Kiplinger's Adviser Intel, formerly known as Building Wealth, is a curated network of trusted financial professionals who share expert insights on wealth building and preservation. Contributors, including fiduciary financial planners, wealth managers, CEOs and attorneys, provide actionable advice about retirement planning, estate planning, tax strategies and more. Experts are invited to contribute and do not pay to be included, so you can trust their advice is honest and valuable.

This series of articles is meant to help you answer some of the many financial and/or estate planning questions that you have been too uncomfortable to ask.

The first one is a doozy: life insurance trusts.

The reason people don't ask about life insurance trusts is that the topic itself can seem daunting and can lead to three grim prospects:

• It's boring
• It's complicated
• It includes talking about dying

In this article, I'll walk you through what you need to know to determine whether you really need a life insurance trust.

First, let's refresh our baseline knowledge of irrevocable trusts.

Irrevocable trusts: The basics

A lifetime irrevocable trust is a trust that you establish during your life, and where you forfeit control over the assets inside. There are three key benefits to using an irrevocable trust as part of an estate plan:

• You minimize future estate taxes by reducing your current estate value and removing future appreciation
• You protect your heirs' inheritance from creditors
• You control when and how heirs receive their inheritance

Irrevocable life insurance trusts

Now, add in the concept of funding this trust with life insurance. An irrevocable life insurance trust (ILIT) is a trust established during your life where the trust either owns a life insurance policy on your life (the grantor) or is named as the life insurance beneficiary. In either case, the policy pays out to the trust upon death.

But why should life insurance be part of your estate plan?

Life insurance can play an important role in estate planning, fulfilling a multitude of roles, including but not limited to protecting your dependents from lost income, covering your debts and expenses after you die, creating an inheritance, or providing liquidity for estate taxes due upon death.

For those individuals looking to create an inheritance, it may be more appealing for the insurance to pay into a trust rather than directly to the beneficiary. This allows the grantor to us the hallmark benefits of a trust, as explained above.

To get these specific benefits, the life insurance policy only needs to name a trust as a beneficiary. An important point to remember here is that the trust must be established first before it is named as the beneficiary on your life insurance policy.

Looking for expert tips to grow and preserve your wealth? Sign up for Adviser Intel (formerly known as Building Wealth), our free, twice-weekly newsletter.

However, for individuals or couples whose net worth is nearing or above the federal estate tax exemption ($15 million/taxpayer and $30 million/married couple in 2026, indexed for inflation), and who are using life insurance to either create an inheritance or offset estate taxes due, then having the trust own the life insurance policy should be considered.

Why? If you have life insurance directly at the time of your death, the entire death benefit payout will be added to your estate, which can potentially create or compound a federal estate tax bill.

If you use an ILIT to own the life insurance policy, you have transferred the value of the policy out of your estate.

For those of you living in states that still have their own estate or inheritance taxes, this could be a powerful tool to minimize that burden.

Life insurance trusts: Key takeaways

Whether you need an ILIT as part of your estate plan is largely determined by your net worth and where you live.

If you believe that a life insurance trust should be part of your estate plan, it's important to work with an experienced attorney and financial planner to guide you on the nuances of this strategy.

This article is for general information only and is not intended as an offer or solicitation for the sale of any financial product, service or other professional advice. Wilmington Trust does not provide tax, legal or accounting advice. Professional advice always requires consideration of individual circumstances.

Wilmington Trust is not responsible for any errors or omissions contained in this article.

All information is provided "as is," with no guarantee of completeness, accuracy, or timeliness, and without warranty of any kind, express or implied.

Wilmington Trust is not liable to you or anyone else for any decision made or action taken in reliance on any information in this article. Opinions are subject to change without notice.

Wilmington Trust is a registered service mark used in connection with various fiduciary and non-fiduciary services offered by certain subsidiaries of M&T Bank Corp.

Related Content

• Is Your Estate at Risk? The Five Trusts You May Be Missing
• How to Handle Irrevocable Trust Assets Tax-Efficiently
• How Life Insurance Can Help You Preserve Your Wealth
• Life Insurance Beneficiary: What It Is and How It Works
• 10 Things You Should Know About Life Insurance

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

When most people think of a will, they imagine a formal document that lays out how money, real estate and high-value possessions will be distributed after death.

While those financial assets are important, the biggest family disputes I see rarely center on a bank account or a piece of jewelry.

The greatest tensions often arise over personal, sentimental items.

Kiplinger's Adviser Intel, formerly known as Building Wealth, is a curated network of trusted financial professionals who share expert insights on wealth building and preservation. Contributors, including fiduciary financial planners, wealth managers, CEOs and attorneys, provide actionable advice about retirement planning, estate planning, tax strategies and more. Experts are invited to contribute and do not pay to be included, so you can trust their advice is honest and valuable.

These are things with little monetary value but deep emotional meaning. It might be the teacup Grandma always used, the painting that hung above the fireplace or the stand mixer pulled out every year for birthday cakes.

These items stir memories, and when they're not discussed or accounted for, they can create confusion and heartache.

When meaning matters more than money

Mike, a close friend, experienced this after his father passed away. Of everything his dad owned, all Mike wanted was the tool set they had used together on countless weekend projects.

That simple gesture would have meant the world to him as a lasting reminder of their time together.

Unfortunately, no one knew, and the tool set was given away before Mike could ask for it.

That story stays with me because I believe that if his father had known, it would have been a no-brainer to pass the tools on to Mike while he was still alive.

The takeaway is simple. Don't assume your family knows what matters to each other. Ask. Talk. Label. Share.

How to handle heirlooms without the drama

Too often, people wait until it's too late to have conversations about personal belongings. Those left behind are forced to make dozens, or sometimes hundreds, of small decisions about items they might not want or recognize their meaning.

Here are a few ways to make it easier for your family:

Have the conversation now. Hold a family meeting and ask which items mean something to your loved ones. You might be surprised by the answers. It's not always a diamond ring; often, it's the everyday objects full of memories.

Give items away now. If there is a mixing bowl you never use or a painting your daughter has always admired, consider passing it on now. You'll get the joy of seeing it appreciated, and it's one less decision for your executor.

Label key items. I've had clients use sticky notes behind framed artwork, under dishes or inside furniture drawers to indicate who should receive them. A simple "For Emma" or "Jack loved this" can go a long way toward preventing conflict.

Include a list in your playbook. One page labeled "Heirloom Instructions" in your estate planning playbook can save your family from confusion and distribute items as you intended.

Blended families and step-relatives can add complexity. Being clear and proactive helps reduce tension and shows your family that you've thought of everyone.

Don't forget about the dog (or cat)

An often-neglected piece of the estate planning puzzle is pet care. Dogs, cats and other animals are family members, but they can't speak for themselves when you're gone.

Make sure your estate planning playbook includes a simple pet directive that outlines:

• Who you'd like to care for your pet(s)
• Routines, medical needs or dietary notes
• Contact information for your veterinarian
• Emergency funds or pet insurance policies

This single page can make all the difference in ensuring your pet goes to a loving home and has proper care. It also relieves your family from having to make a rushed or emotionally difficult decision during an already stressful time.

Household bills and subscriptions: A hidden headache

One of the most underrated sources of confusion after someone passes is managing their monthly bills.

Today, many households have dozens of automatic payments from utility bills and insurance to streaming services and club memberships. Without clear direction, family members are left trying to decipher what's owed, what's recurring and which accounts are funding which bills.

Judy, a client of mine, handled this masterfully. In her estate planning playbook, she keeps:

• Copies of every recurring bill
• Notes on which bank account pays which bill
• Account numbers, contact information and customer service details

Her rationale is simple. If something happened to her, she doesn't want her family spending hours on hold with the water company or struggling to identify which charges were still active.

Something many people don't consider: If a recurring bill continues after death, such as AAA, gym memberships, even a car loan, companies will often send a refund check in the deceased person's name. This creates even more paperwork for executors trying to deposit or cancel it.

Looking for expert tips to grow and preserve your wealth? Sign up for Adviser Intel (formerly known as Building Wealth), our free, twice-weekly newsletter.

Having copies of bills is not just about transparency; it gives your family proof of where money is going and helps them close out accounts quickly and correctly.

It also avoids the headache of trying to persuade companies to issue refunds when you don't have documentation.

I've seen families spend hours trying to recover small amounts simply because they didn't have evidence of what had been paid and from where.

It's not about the money — it's about the meaning

It's rarely the most expensive items that cause the most stress. It's the small stuff — the irreplaceable, sentimental, personal touches that carry family meaning.

This part of estate planning is not about writing a check; it's about writing down what matters.

The best way to do that is to communicate. With a playbook, you don't just leave instructions. You leave clarity, comfort and confidence for your family.

In the final article of this series, we'll explore how to bring an Estate Planning Playbook to life by holding a family meeting, sharing your decisions and making sure everything is up to date and accessible.

Creating a plan is just the first step. Putting it into action is where the real impact happens.

Related Content

• Estate Planning: How to Protect Family Treasures
• Six Ways to Make Talking With Family About Estate Planning Easier
• Where There's a Will, There's a Way Your Assets Will Be Distributed as You Wish
• What Would You Like to Leave Behind? A Financial Planner's Guide to Family Wealth Discussions
• Summer Is Made for Sun, Fun … and Estate Planning Conversations

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

For same-sex couples who aren't married, the gap between what you think happens and what the law actually says can be huge.

When something goes wrong, such as an illness or death, that gap can swallow everything you've built together.

Kiplinger's Adviser Intel, formerly known as Building Wealth, is a curated network of trusted financial professionals who share expert insights on wealth building and preservation. Contributors, including fiduciary financial planners, wealth managers, CEOs and attorneys, provide actionable advice about retirement planning, estate planning, tax strategies and more. Experts are invited to contribute and do not pay to be included, so you can trust their advice is honest and valuable.

What marriage automatically provides

When you're legally married, the law automatically gives your spouse important rights. You don't have to fill out a single form for them to:

• Inherit property without going through probate
• Own the home outright through survivorship
• Step into decision-making roles for finances and health care
• Access retirement and survivor benefits
• Be recognized as next of kin without question

But if you're not married, none of this will happen automatically. Even if you've been together for 30 years, the law may treat you like you're strangers.

The legal system can work against you

Some of the toughest cases I've ever handled weren't against hospitals or banks; they were against families.

When a partner gets sick or passes away, the people who've disapproved of the relationship all along suddenly have legal power. They can step in, claim authority and, in some cases, push the surviving partner aside entirely.

I've seen longtime partners barred from hospital rooms, cut out of funeral plans, even forced out of homes they helped build. All because the law didn't recognize their relationship.

Ownership rights are fragile without marriage

If you're married and own a house together, the law gives you strong protections. When one spouse dies, the other automatically owns the home. There's no probate and, hopefully, no fights.

But if you're unmarried and the deed doesn't spell things out clearly, the default is what's called "tenants in common." That means each person owns a share. If one partner dies, their family inherits their share.

And yes, they can force a sale. I've seen partners who've spent decades in the same home suddenly facing eviction because their name wasn't on the title.

Inheritance gets even messier without kids

Some same-sex couples don't have children together, which can make inheritance more complicated. When there are no kids, state law will start looking at other family members such as parents, siblings, nieces or nephews.

If they didn't approve or support the relationship, things can get ugly for the surviving partner.

Looking for expert tips to grow and preserve your wealth? Sign up for Adviser Intel (formerly known as Building Wealth), our free, twice-weekly newsletter.

Even for couples who marry later in life, this creates tension. Once the survivor dies, the assets usually flow to their family, not both families. That can turn already complicated family dynamics into full-blown legal battles.

Medical decisions: Who speaks for you when you can't

One of the most painful scenarios I've seen is when someone lands in the hospital, unconscious or unable to speak, and their partner has no legal right to make decisions.

Hospitals don't turn to partners. They turn to next of kin: parents, siblings, adult children. And if that family never accepted the relationship, they could shut the partner out completely.

Financial decisions in a crisis

The same is true with money. If you don't have a financial power of attorney, your partner has no legal right to access your accounts or pay your bills. Your family can go to court to get control, and your partner can be left on the sidelines.

This happens more often than people think. It's not just theoretical. I see it every year.

Funeral and burial rights

Michigan law gives next of kin the right to make funeral decisions. If your partner isn't legally recognized, their voice may not matter.

A simple funeral representative designation can fix this. But without it, families can, and sometimes do, push partners out.

The answer: Real planning

Here's the good news: You don't need a marriage license to protect your partner. Instead, you need a plan. By making a plan, you can:

• Sign a will or create a trust
• Put both names on the house the right way and identify how its owned, jointly or in common
• Name your partner in your medical and financial powers of attorney
• Choose your funeral representative
• Set up clear beneficiary designations

These aren't just legal documents. They're love letters that say, "I trust you, and I want you protected."

How family disputes can be prevented

Clear, written estate plans stop a lot of fights before they even start. When your intentions are in black and white, there's less room for families to step in and take control.

I've seen fights that tore families apart. I've also seen the relief on a client's face when everything was planned properly and no one could override their wishes.

A special word to older couples

Many same-sex couples in their 50s, 60s and beyond built their lives together long before marriage equality was law. They've saved, built homes and cared for each other.

But without legal planning, everything they've built can unravel the moment one partner becomes ill or passes away.

A strong call to action: Protect what you've built

If you're in a same-sex relationship, it's imperative to review your deed and titles as soon as possible.

You should also put a will or trust in place, assign powers of attorney for health care and finances.

Choose who makes funeral decisions and talk openly about your wishes.

Estate planning isn't just about paperwork. It's about making sure the person you love isn't left powerless at the worst possible time. You've built a life together. Now make sure the law respects it.

Pat Simasko is an investment advisory representative of and provides advisory services through CoreCap Advisors, LLC. Simasko Law and CoreCap Advisors are separate and unaffiliated entities.

Related Content

• Four Estate Planning Steps to Promote Peace in Blended Families
• To Avoid Probate, Use Trusts for Estate Planning
• Here's What Couples Need to Know About Merging Finances
• How Getting Married Affects Your Social Security Benefits
• Leaving Property to Multiple Heirs? What to Consider

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Retirees are in a unique planning position compared with other tax filers heading into the winter season. Not only are they faced with complex withdrawal rules on RMDs, but many have access to age-specific tax deductions, including the new $6,000 “senior bonus” deduction.

Whether you leverage this time by making strategic money moves or wait until the last second to act can affect your financial position next year (and potentially this year).

Here are 10 tax moves you can make before December 31 to optimize next year’s retirement income and potentially lower your 2025 tax bill.

Retirement tax plan in 2025 and 2026

Kiplinger only considered individual income returns for the retiree tax planning checklist. As such, business taxes were excluded, as well as educational expenses or tax breaks typically associated with self-employment.

The retirement tax moves listed might be affected by a taxpayer’s income level and filing status. State retirement tax treatment may differ.

Consult with a qualified tax professional for specific advice on your financial situation.

RMDs

1. Review your 2025 RMD (and 2026) tax strategy

As a retiree, you might already be familiar with the concept of required minimum distributions (RMDs). An RMD is money that must be withdrawn from a 401(k), 403(b) or other traditional IRA every year after you reach a certain age. If you don’t make the withdrawal, you could be subject to a 25% penalty on the amount not distributed.

Here are the current age requirements for RMD withdrawals:

• If you’re 73 or older, you must take an RMD from your retirement accounts by December 31.
• If you turned 73 in the current year, your first RMD is due by April 1 of the following year, but your second RMD is still due by December 31 of that same year.

If you’re subject to RMD rules and haven’t already withdrawn your RMD for 2025, you should do so now to avoid the penalty. But you’ll also want to look at 2026’s RMD withdrawal for retirement tax planning purposes. This might help you avoid common RMD tax traps:

• Preventing the “two RMD trap.” The IRS gives an extended deadline of April 1 to take your first RMD. However, all subsequent RMDs must be taken by December 31, meaning that if you delay until April, you’ll have to take two withdrawals in one year. That could push you into a higher tax bracket and increase your overall tax liability for that year.
• Reducing investment risk. RMDs are calculated in part using your RMD account balance from the prior year. If there’s a market downturn in, say, 2026, you’ll still have to withdraw the predetermined amount at the end of 2025 (which might have been higher). This could result in the forced selling of IRA investments at a lower value just to satisfy your RMD obligation.

By reviewing your RMD withdrawal strategy now, you can minimize the effect of market volatility on your portfolio. This often means strategically withdrawing cash or bonds during downturns.

Alternatively, during an economic upturn, you’d likely want to take your RMD earlier in the year, locking in investment gains by selling fewer shares to meet the RMD amount.

You can also take steps to lower your taxable income from other revenue streams, which helps to counteract the larger taxable income resulting from RMDs and keeps your overall tax bill more manageable in 2026.

For more information, see Required Minimum Distributions: Rules, Deadlines, and Key Points to Know.

IRA Conversion and Investment Timing

2. Take advantage of capital loss carryover: Tax-loss harvesting

Tax-loss harvesting is the strategic practice of selling taxable account investments (such as trusts or brokerage accounts) to maximize tax savings. Here’s how this strategy works:

• You have at least one capital asset (such as real estate, stock, etc.) that you sell for more than you paid for it, resulting in a capital gain.
• You sell at least one investment for less than you originally paid, resulting in a capital loss.
• Then you offset the total amount of capital losses against your capital gains, effectively leading to a 0% tax on any gains offset by losses.
• If your total capital losses are greater than your gains for the year, you can use the excess to deduct up to an additional $3,000 against your ordinary income. Any remaining losses that exceed this $3,000 limit are carried forward indefinitely to offset future capital gains.*

When would tax-loss harvesting be useful? Here are a few examples:

• If you’re subject to the highest tax rate on capital gains, you can avoid that tax through tax-loss harvesting, resulting in valuable savings. Those savings can be reinvested in securities or used to help rebalance your portfolio.
• By deducting up to $3,000 of capital losses against ordinary income, you can save on taxes typically levied on retirement plan distributions, pensions, and other ordinary income sources. An unlimited amount of capital loss might be carried forward to offset gains from real estate sales, mutual funds, ETFs, etc..

However, before you commit to tax-loss harvesting, look out for the “wash sale rule,” which says you can’t reinvest in similar securities 30 days before or after you sold the capital loss ones. If you do, your capital losses won’t count as an offset to your capital gains.

*Note: The deduction amount is $1,500 for taxpayers married filing separately.

For more information, see: Capital Losses: Rules to Know for Tax Loss Harvesting.

3. Perform a Roth conversion

If you have a traditional retirement savings account (such as a 401(k), 403(b) or traditional IRA), you might be wondering: Is now the right time to convert to a Roth IRA?

The trade-off is clear: With a traditional IRA, you pay taxes when you take a distribution; with a Roth account, you pay taxes now on the funds you contribute.

Consequently, converting from a traditional IRA to a Roth means you must pay the income tax in the year of conversion, but the potential long-term benefits of tax-free growth might be worth the upfront cost.

Reasons you might consider converting your traditional IRA to a Roth account:

• You expect your 2026 income tax rate (or later) to be higher. Often, there’s a “lull” for retirees in the years after they stop working and before they start receiving Social Security, where income is at its lowest. If you’re there now, you might consider converting to a Roth before the end of 2025, and your income (and/or federal tax rate) is higher.
• You want to avoid RMDs. Those yearly required withdrawals from your IRA disappear with a Roth conversion. Your money in a Roth account grows tax-free throughout your entire lifetime and gives you greater control of when and how much you withdraw each year, which might be ideal for those who want more flexibility with their retirement tax plan.
• You plan to leave money to your heirs. If you have a valuable estate, a Roth generally offers beneficiaries tax-free withdrawals. Comparatively, traditional IRA withdrawals are taxed as ordinary income for your heirs.

*Note: If you're 73 or older at the time of the conversion, you must first take your RMD from your traditional IRA for the year of the switch.

But the grass isn’t always greener on the Roth side of things. Here are a few reasons why you wouldn’t convert a traditional IRA to a Roth:

• You expect your 2026 income tax rate (or later) to be lower or the same. If your projected future tax rate is lower than your current rate, you might not want to convert a traditional IRA to a Roth, as you would be paying taxes at a higher rate vs later (in 2026) when your rate is lower.
• You have to use IRA funds just to pay the conversion tax bill. Converting a traditional IRA to a Roth requires you to pay the federal income tax owed upfront. If you're forced to use funds from the traditional IRA to pay off the conversion taxes, the conversion can incur early withdrawal penalties. Taking an early withdrawal not only diminishes your savings but also significantly lowers the primary benefit of the Roth account: Tax-free growth.
• You need to use the converted funds within five years. If you’re under 59½, you can’t use your funds for five years after a traditional IRA to Roth conversion. Otherwise, you could be subject to a 10% early withdrawal penalty. (However, if you’re older than 59½, you might withdraw the funds penalty-free before the five years are completed, though any earnings on those funds will be subject to income tax.)

Like other checklist items on this retirement tax planning list, you’ll want to consider your overall retirement tax strategy when deciding whether to convert your traditional IRA to a Roth account. However, the deadline to complete a 2025 conversion is December 31.

For more information, check out Kiplinger's report, 6 Tax Reasons to Convert Your IRA to a Roth (and When You Shouldn't).

4. Convert a 529 to a Roth (if you can)

While we’re on the topic of conversions, let’s review an exciting (and relatively new) tax law: The Secure Act 2.0. Among other things, this law enacted a provision that allows you to convert a 529 savings plan into a Roth account.

Here are the rules for a 529 savings account to Roth IRA conversion:

• The 529 plan must have been open for at least 15 years.
• Plan contributions must have been held in the account for at least five years before conversion.
• The beneficiary for both the 529 and the Roth must be the same, and the transfer must be direct: From one plan trustee to the other trustee.
• The beneficiary must have earned income at least equal to the amount of the rollover.
• You might roll over up to $35,000 of unused 529 funds into a Roth IRA (per beneficiary). That’s a lifetime limit, meaning you’ll need to total all transfers across all 529 plans that are rolling over into Roths.

The rollover is subject to the annual Roth IRA contribution limits. (You might want to spread a large conversion over several years.) But if you can roll over your 529 plan into a Roth, the federal tax benefits might be worthwhile.

Benefits of a 529 to Roth conversion. You won’t be taxed federally on the conversion. Plus, you’ll avoid penalties for withdrawing funds from a 529 for non-educational expenses, with the added benefit of jumpstarting the beneficiary’s retirement savings.

Itemized deduction timing

5. Organize your bunching strategy for tax deductions

The tax strategy of “bunching” means you pay two years’ worth of itemized expenses in the current tax year to push your total itemized deductions higher than the standard deduction amount.

If performed correctly, you’ll gain one year of high itemization followed by one year of the standard deduction, which maximizes your total tax savings for both years.

Bunching deductions typically relies on the fact that you:

1. Can claim the itemized deduction on your income tax return (at least for the year that you “bunch”)
2. Have the flexibility to pay for some of your expenses early

You should consider bunching your deductions in 2025 if you anticipate a higher federal income tax rate in 2026. Bunching deductions might also be beneficial if you expect your tax situation to be negatively impacted by new tax legislation in 2026, such as the new AGI floor for itemized charitable deductions (more on that later).

Here are a few ways you might “bunch” your deductions and acquire tax savings in 2025:

• Maximizing the state and local (SALT) deduction. Starting in 2025, you can deduct up to $40,000 in SALT on your federal income return (if you meet income requirements). By prepaying your fourth-quarter property taxes before December 31 (if your state allows it), you could reach higher tax savings before the AGI floor kicks in in 2026.
• Front-load charitable contributions. You can use a donor-advised fund to take advantage of more favorable tax rules in 2025 (more on that below).
• Pay high medical expenses early. Do you have significant medical expenses scheduled for early 2026? If those qualified procedures are near the 7.5% AGI threshold for the medical expense deduction, consider paying them before the end of 2025 to take advantage of bunching.*

*Any medical procedures completed “substantially beyond” 2025 might not qualify for the medical expense deduction in 2025.

6. Finish your charitable donations

If you itemize, be sure to finish making your charitable contributions before the December 31 deadline. Donations can be a powerful way to reduce your taxable income for the year. (Though adjusted gross income (AGI) limits apply.)

Starting in 2026, the rules for itemizing charitable giving will get tighter, making your contributions this year even more valuable.

That’s because the Trump/GOP 2025 spending bill, known to some as the “One Big Beautiful Bill,” provides an AGI floor for itemizers as well as a deduction cap for high-income earners in 2026. Here’s a table summarizing the new tax rules for charitable deductions going into effect next year:

For 2026, a charitable contribution "floor" will be introduced for itemizers, regardless of income level. Only total contributions above 0.5% of your AGI will be deductible. For example, if you had $200,000 AGI and donated $2,000, only $1,000 would be deductible.

Charitable contributions for high-income itemizers will also be subject to a cap in 2026. The new law imposes a 35% limit on the value of all itemized deductions for high earners, meaning taxpayers in the top bracket will receive a lower tax break compared to 2025.

Both of these provisions make “bunching” deductions more valuable than ever. You can achieve this by contributing to a donor-advised fund (DAF). A DAF allows you to claim an immediate tax deduction for your contributions this year (under the more favorable 2025 rules), while the fund awards the “bunched” money to your chosen charities over time. This might help you maximize your deduction before the 2026 limits take effect.

For more information, see our guide: The Charitable Donation Tax Deduction: What to Know.

Optimize Retirement Tax Efficiency

7. Consider making a qualified charitable distribution in 2025

A qualified charitable distribution (QCD) is a distribution from your IRA to a qualified charity of your choice. However, not everyone’s eligible to make one. Here are the eligibility requirements for 2025:

• You must be age 70½ or older.
• You can donate up to $108,000 (or $216,000 if married spouses) in a single tax year.
• The distribution must be made from a traditional IRA, an inherited IRA, or an inactive SEP/SIMPLE IRA.

QCDs require that you “give up” a portion of your annual IRA distribution to a charity, effectively going without your hard-earned cash. But making a QCD goes hand-in-hand with many of the retirement tax items we’ve already covered on our list. For example:

• Avoiding the taxability of RMDs. If you don’t need all the money from your RMD, you can donate a portion as a QCD. This has the double benefit of satisfying your RMD while paying no federal income tax on the portion you donate.
• Lowering your AGI. Remember that charitable deduction cap coming into effect in 2026 for high-income earners? If you make a QCD in 2026, you can effectively reduce your AGI, potentially lowering your federal income tax bracket next year and thereby avoiding the new AGI cap.
• Reducing high taxes on Social Security benefits and Medicare premiums. Because your QCD lowers your gross income, you might see a reduction in the amount of tax you pay on Social Security in the year you made the QCD, or your Medicare premium tax two years later.

That said, a QCD doesn’t qualify as an itemized “charitable deduction” on your income taxes, which might hamper your bunching strategy. You also can’t use a DAF to make a QCD, so it might make your approach to donating less flexible.

For more information, see: What is a Qualified Charitable Distribution?

8. Update your retirement income withholding

There are two primary methods for retirees to pay federal income taxes. The first is through estimated tax payments, which are due quarterly.

The second is through automatic withholding by filling out the appropriate form (e.g., pensions and annuities use Form W-4P, Social Security benefits use Form W-4V, etc). We’re going to discuss the withholding option.

You should review your retirement withholding form(s) annually for potential changes in your tax situation. This is particularly pertinent for 2026, when the withholding forms will be updated for new tax deductions such as:

• The car loan interest deduction. Worth up to $10,000 on qualifying new vehicles, some suggest the estimated annual tax savings could average around $400 to $500 per taxpayer in 2026.
• The bonus deduction for those age 65 or older. Worth up to $6,000 for eligible individuals with less than a certain income, the Tax Policy Center estimates that about half of eligible older adults will see some benefit.

The main benefit of updating your retirement withholding is that you can take advantage of the tax deductions throughout the year instead of just at year-end.

Not only does this give you more income month-to-month, but you can also invest those extra dollars into a savings account or other security and start accruing interest right away.

The IRS considers withholding to be paid “evenly throughout the year” regardless of when you actually withheld your taxes. If you accidentally underpay your taxes during one quarter, you can increase your withholding toward the end of the year and cover the shortfall. This is another reason you should review your retirement tax withholding before December 31.

Review Important Tax Documents

9. Review health care coverage: Open enrollment for Medicare

We’re in full swing of open enrollment season (which typically lasts until December 7 for Medicare, and until January 15 for Affordable Care Act (ACA) marketplace insurance). This is the time to ensure your health care coverage and plan costs still meet your needs and compare potential alternative plans.

Reviewing your medical plans might be more important than ever. If you’re currently using ACA subsidies, those are scheduled to expire at the end of 2025 (unless Congress acts). The expiration is expected to lead to significant premium increases and higher out-of-pocket costs for many enrollees in 2026.

• Medicare premiums and IRMMA are projected to increase. As reported by Kiplinger, Medicare Part B premiums and deductibles are expected to increase by about 12%, and Part D IRMMA surcharges might increase by as much as 6%.
• Prescription drug coverage will likely see a higher maximum deductible. Current estimates place the projected 2026 out-of-pocket cost cap at $2,100, compared to $2,000 in 2025.

What should you do? Review the Annual Notice of Change (ANOC) letter you received from your current insurer to understand the plan changes going into effect in 2026. The ANOC might inform you of income-related premium increases and if your doctor network is still covered.

By using previously discussed tax strategies like QCDs or Roth IRA conversions, you might be able to reduce high anticipated Medicare premiums.

However, keep in mind that Medicare premiums are calculated on modified adjusted gross income (MAGI) from two years prior. Any change you make in tax year 2025 will not impact your Medicare premiums until 2027.

Related: Health Insurance Tax Credits and the Government Shutdown: What to Know.

10. Review your estate planning goals

Lastly, now’s a good time to review your will, power of attorney documents, and beneficiary designations on all retirement accounts and insurance policies.

Reviewing those important documents each year helps ensure that your estate-planning goals still align with your current retirement goals, especially in light of new tax rules.

Here are a couple of things to know regarding your 2026 estate tax plan:

• The annual gift tax exclusion remains the same. For both the 2025 and 2026 tax years, the annual gift amount is $19,000 (single filers) or $38,000 (married filing jointly couple). Gifting money tax-free helps minimize estate tax liability for your heirs when you pass away.
• The estate tax exclusion amount increased. While the basic exclusion amount for individuals was $13.99 million in 2025, the exclusion was increased to $15 million in 2026. This allows individuals to transfer a larger amount of wealth estate tax-free, potentially offering heirs more post-tax funds.

While the estate exemption amount remains high in 2026, you might want to make large gifts in 2025 to “lock in” asset values if you think those assets could appreciate significantly. This effectively moves that future appreciation out of the estate, avoiding estate tax on future growth.

At the same time, assets in an estate are given to heirs at a “stepped up” basis, meaning the heir receives those assets at fair market value. This effectively eliminates the capital gains tax (should your heir later decide to sell the asset) and is one of the benefits of keeping assets in an estate.

Everyone’s estate tax liability looks different. Outsource your taxes to a qualified tax adviser when necessary.

Read More

• How the IRS Taxes Retirement Income
• The Rubber Duck Rule of Retirement Tax Planning
• New Tax Rules High-Income Earners Should Know Before Donating in 2025
• Test Your Retirement Tax IQ: How Much Do You Know?

Getting your estate plan and financial house in order is a major accomplishment, but it doesn't end when the documents are signed.

One of the most important — and often overlooked — steps is making sure the right people know how to carry out your plan and your wishes.

Here are steps to ensure all relevant parties have the information to implement the plan you've created.

Kiplinger's Adviser Intel, formerly known as Building Wealth, is a curated network of trusted financial professionals who share expert insights on wealth building and preservation. Contributors, including fiduciary financial planners, wealth managers, CEOs and attorneys, provide actionable advice about retirement planning, estate planning, tax strategies and more. Experts are invited to contribute and do not pay to be included, so you can trust their advice is honest and valuable.

1. Share key details with trusted agents

Start by letting your financial power of attorney, executor or trustee know that they've been named in your documents — and what their role entails.

If these include a spouse or close relative, consider sharing your personal net worth statement or at the very least, let them know where it's stored and how to access it.

Because of today's security protocols, it's also smart to provide them with the basics: your phone password and the answers to security questions, or how to access them in the future.

Without this, even simple financial tasks can become roadblocks.

2. Make your health care wishes clear

It's important to have a thorough conversation about your personal wishes. Make sure your health care power of attorney (HCPOA) agent understands your preferences for medical treatment and end-of-life care so they can feel confident acting on your behalf.

That includes directives about life-sustaining measures — or the refusal of them.

If you anticipate family conflict, communicate your wishes broadly so there's no room for confusion or disputes later.

In addition, provide your HCPOA agent and close family with a current list of medications and dosages (a photo of your prescription bottles can work, too). Having this on hand can be invaluable in an emergency.

3. Write a letter of wishes

Legal documents cover the essentials, but they don't capture everything. We highly recommend writing and passing along a letter of wishes to your loved ones.

This letter might include information about how you'd like to be remembered and directions for your funeral or memorial services — the type of service you would like and any preferences related to donations, special readings or music selection.

It's also helpful to reiterate the instructions about cremation or burial you listed in your HCPOA. This guidance spares your family from uncertainty during an already difficult time and provides a roadmap for decision-making that helps ease the burden.

4. Decide what to share with beneficiaries and when

How much you tell beneficiaries depends on their age and circumstances. For younger children or grandchildren, you might not want to share information related to your estate plan, but you can start by teaching them about financial literacy, educating them on the values of saving and, perhaps, explaining the basics of investing.

For adult beneficiaries, it can be useful to let them know whether they'll receive an inheritance outright or in trust so that they can plan their own financial futures with more confidence. If you are leaving assets to charity, sharing that information can also be helpful.

5. Communicate with professionals

While family conversations are crucial, it's just as important to communicate with your professional team. Make sure your estate planning attorney, financial adviser and CPA all know about updates to your plan so that taxes, investments and legal documents stay aligned.

Looking for expert tips to grow and preserve your wealth? Sign up for Adviser Intel (formerly known as Building Wealth), our free, twice-weekly newsletter.

You'll also want to make sure they know who you've appointed as agents, safekeepers of documents, etc., along with their contact information. Keeping these professionals on the same page reduces the chance of oversights and confusion later.

Final thoughts on reviewing your estate plan

Taking the time to organize and review your finances and critical estate planning documents can create peace of mind for both you and your loved ones.

By breaking down the process into manageable steps and addressing key areas such as documenting your personal net worth, confirming asset titling, updating power of attorney instruments and revising will/trust documents, you can ensure that your plans reflect your current life circumstances and goals.

While you don't have to follow the exact plan outlined in our step-by-step series, you won't regret reviewing your documents and sharing information with trusted family members and agents, and they'll appreciate it.

The effort you put into this process now will create a lasting impact, offering both financial security and emotional reassurance for your family in the years ahead.

One last note — we often tell clients that estate planning is not called "Estate Done" for a reason; you should plan to repeat this same process every three to five years or after a significant life event.

Related Content

• Protect Your Family's Future: Avoid These 12 Common Estate Planning Mistakes
• I'm a Financial Adviser: You've Built Your Wealth, Now Make Sure Your Family Keeps It
• What Would You Like to Leave Behind? A Financial Planner's Guide to Family Wealth Discussions
• Resist the Taboo: Talk to Your Kids About Family Wealth
• Prepare Your Family for the Financial and Legal Aftermath of Your Death

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Kiplinger: Your new book is about becoming a financial caregiver for your mother after she grew seriously ill due to complications from spinal surgery. What is financial caregiving?
BP: Financial caregiving is when you step into somebody else’s shoes and take over their affairs. Most people are dragged into this role sideways and have no idea how the person they’re helping has been handling money.

When I started helping my mom, I knew nothing about how she had been running her household, and she wasn’t in a position to tell me anything after her back surgery. To keep the mortgage paid and the lights on, I had to figure out how she had been paying her bills by sorting through the papers on her desk.

What are the most important steps people should take to prepare for the possibility of becoming a financial caregiver?
BP: You need to make sure the person you’re going to take care of has two key documents: a durable power of attorney that legally allows you to make financial decisions on their behalf and, if you’re also going to be making medical decisions, a health care proxy.

And make sure you have access to those documents. If you can’t put your hands on them, you’re going to be stuck and might end up in court.

For financial matters, a lot of people think it’s enough to be a joint owner on an account with an aging parent, but that can be problematic. There may be one account that you’re a joint signer on but other accounts you need access to — brokerage accounts, credit cards, that sort of thing.

You need power of attorney for the cable company, the electric company, the lawn care company. You never know when somebody’s going to say they need power of attorney in order to process whatever it is you want to process.

What if the tables are turned? How can people prepare their loved ones to step into the role of financial caregiver for them?
BP: Put together what I call a cheat sheet and a death file. My mom did this for me. The cheat sheet lists all of the person’s medicines and their doses, surgical history, key doctors, their Social Security number.

The death file is everything you need if something happens to them, like their will or trust, a list of their accounts, birth certificate, life insurance contract and cemetery plot information.

What’s the hardest thing about managing someone else’s money?
BP: The hardest part for me was trying to maintain my mom’s very precise financial routine. My mom was always very particular about her finances and a little old-fashioned. She didn’t trust electronic banking. It was all paper statements and paper checks.

I was managing her finances from a thousand miles away, and I had to take care of things electronically. I always thought she was going to be mad at me. I was afraid the whole time I wasn’t living up to her standards.

My general advice is to keep people in the loop. The person you’re taking care of or a sibling is going to want some accounting. I kept a spreadsheet of money coming in and going out of my mom’s account and things I paid out of my own pocket that I then reimbursed myself for.

What is one thing you wish your mom had done to better prepare you?
BP: I wish we had talked more openly in the years before she got sick, because there were a lot of things that didn’t occur to us to talk about once we were in emergency mode. These were small things, like asking about certain missing pieces of jewelry, but still important.

The one that haunts me is that I think she had a storage locker in the basement of her apartment building that had my grandmother’s paintings in it, and I couldn’t find any record of it after my mom died. Maybe someday the building will call me and say they found it.

Note: This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.

Related content

• How to Access Your Parents’ Medicare: Enroll and Manage Their Care
• Why You Need an Advance Directive
• How to Organize Your Financial Paperwork for Your Heirs

Answer: A lot of people experience sticker shock when they sit down to look at college costs today. For the 2025-2026 academic year, U.S. News & World Report puts the average cost of tuition and fees at a four-year, public in-state school at $11,371.

For a public out-of-state school, the average price tag is $25,415, and for private universities, it's $44,961.

Meanwhile, an estimated 42.5 million people today owe federal student loan debt, according to the Education Data Initiative, which also says the average public university student borrows $31,960 to get a bachelor’s degree.

Owing all that money can take a toll. A late 2023 Bankrate survey found that 59% of student loan borrowers felt forced to delay key financial milestones because of their student debt, including building emergency and retirement savings.

If you’re in a strong enough financial position to help pay for your grandchildren’s education, you might be eager to ease that burden — both for them and your grown children who might also be struggling to set aside money for college savings.

If so, a 592 plan is a good place to start. These plans offer the benefit of tax-free gains and withdrawals, provided the money is used to cover qualifying educational expenses.

You might wonder if it’s better to make a large lump-sum contribution to a 529 plan now or spread those funds out evenly over the years. You could go either way. It’s important to understand the pros and cons of both options.

The case for megafunding a 529 up front

If you can afford to fund a 529 plan with a lot of money up front, it could pay to do so, says Jonathan Sparling, director at CollegeWell.

As he explains, “Contributions to 529 plans are excluded from an individual's taxable estate, even though the account owner retains control of those funds.”

Moreover, Sparling says, “529 plans are eligible for the super-funding provision, which allows individuals to front-load five years of contributions in one tax year. A married couple could contribute as much as $190,000 per beneficiary, thereby reducing their taxable estate by that amount of money.”

There’s also the benefit of time to consider from an investing standpoint.

“Contributions made to 529 investment plans when a child is very young have more time to accumulate growth and weather market fluctuations. The same is true for 529 prepaid plans, like ones provided by certain states and the Private College 529 Plan,” he says.

With the Private College 529 Plan, Sparling explains, contributions lock in a percentage of tuition and fees at nearly 300 member colleges across the country.

“Making a lump-sum contribution earlier on locks in more years of tuition at a lower rate, protecting against future tuition inflation,” he says.

The case for funding a 529 plan through the years

If you can afford to front-load 529 plan contributions, not only does it give your money that much more time to grow, it’s also an expense you won’t have to think about year after year.

However, Brian Schmehil, CFP and managing director of Wealth Management at The Mather Group, points out that while you’re generally better off investing a lump sum of money, this approach increases your market-timing risk compared with dollar-cost averaging year after year.

Schmehil also points out that it’s important to consider the tax benefits your state might offer.

“Many states limit the amount you can deduct from your income each year,” says. “Spreading out your contributions can provide a guaranteed tax benefit to you and your family. In some cases, the value of this guaranteed tax benefit may outweigh the uncertainty of market returns.”

Schmehil also says that making contributions on a yearly basis gives you more flexibility if your circumstances, or those of your beneficiaries, change.

For example, you might end up in a situation in which your health care costs increase dramatically later in retirement. One of your grandchildren might decide that once they reach middle school, they’re interested in a specific trade and don’t wish to attend college.

Even though 529 plans give you some flexibility to switch beneficiaries, ultimately, you’ll get even more flexibility by having your money outside one of these accounts.

Any 529 plan contributions you make should go a long way

When it comes to funding a 529 plan, there’s really no right or wrong approach. Sparling also points out that not everyone can make a significant lump-sum contribution to a 529 plan, so for many people, spreading out contributions over time is the only feasible option.

No matter which option you choose, as Sparling says, “Regardless of when contributions are made, every dollar saved for college can help offset future costs and increase college options for their grandchildren.”

Read More

• I Want to Retire, but I Have to Keep Working so My Adult Kids Have Insurance
• Use the 529 Grandparent Loophole to Maximize College Savings
• The Best 529 Plans of 2025
• Why You May Not Want to Move Near the Grandkids in Retirement

Because Ann’s mother has managed her own finances since a rough divorce many years ago, Ann assumed her mother would have long settled the plans for her estate. But, Ann admits, she never probed too deeply, because her mother rarely wanted to discuss any details. “Now we’re realizing that there are a lot of gaps in her plan,” Ann says, with some frustration. “I think we need to step in. But to be honest, she’s still in control and doesn’t want our input at all.”

The road to a fully executed estate plan is rarely smooth, despite the best intentions of all involved, says Shaila Buckley, an estate planning attorney in Boise, Idaho. “You’re dealing with the intersection of death and money, and people are not always their best selves,” she says.

Nonetheless, many estate planning experts say that some of the thorniest problems are among the most common. With professional support, many of these issues — from administrative hiccups to disputes over what’s fair (and for whom) — it’s possible to shield your own plan from some of the more preventable snafus.

A pre-warning: Owing to the potential for conflict, addressing these issues during the holidays may not be ideal. Emotions run high this time of year, and there is great potential for conflicts. Use the holidays to reflect on some of these tasks. With a bit of foresight and professional support, many estate planning hurdles can be ameliorated — or avoided altogether.

1. Leaving your plan unfinished

The challenge. At the top of the list is the very issue Ann J. and her brother are contending with: Their 92-year-old mother’s reluctance to finalize her plan. It's a well-known fact that few people have a will or estate plan: only 24%, according to Caring.com’s 2025 Wills and Estate Planning study, a substantial decrease from the 33% in 2022 who said they did have a will. Just as concerning are the numbers of families with incomplete plans: Unsigned paperwork, assets that haven’t been transferred to an existing trust, or a tough decision left hanging can hold up an estate plan for years.

There’s a technical term for this, says Buckley: “We call it waiting too long, and it can be disastrous.”

Many people know that dying “intestate” (without a valid will) means that your assets would be distributed by law, not according to your wishes. What many people don’t realize is that if there are existing documents — say, a trust or will set up many years ago —“those become the controlling documents, and your assets are distributed accordingly,” says Buckley.

Worse, Buckley adds, is if families wait to resolve a delay, and the individual in charge of the plan becomes ill, or an attorney deems them incapable of making legal decisions. In that case, the last valid documents also prevail, whether the person wanted it that way or not.

What to do. The first step, says Jonathan Kolmetz, a certified financial planner and a licensed therapist who practices financial therapy in Houston, is to not address the obvious problem: i.e., a distrust of lawyers or a pattern of putting things off. For many in the Baby Boom generation and older, the taboo about discussing money — with adult children or sometimes even between two members of a couple — can be a powerful undercurrent. “Often, a couple has a certain communication style that has functioned for them in certain ways, but now it’s holding up the process,” Kolmetz says.

The quieter person in a couple may have preferences they’re not expressing. Or, as in the case of Ann J.’s mother, there may be unspoken fears — left over from her divorce or her own family’s history — that she’s trying to manage by keeping her kids in the dark. The key is taking the time, perhaps getting professional support, to foster a more empathetic conversation. “When we can slow down and actually listen to each other, that creates more awareness,” says Kolmetz. “It can lessen conflict, so we can empathize — and that really does help people move forward.”

2. Keeping your estate plan to yourself

The challenge. How much of your estate plan should you share with your family? And for those with older parents: How much should you expect them to share with you? The issue of transparency is a big hurdle for many families, because there are arguments in favor of saying more as well as saying nothing at all.

What to do. One advantage of being more transparent is that it allows heirs to raise questions directly with the older generation. “I see so many fights between siblings about what their mom and dad intended,” says Lucas Spaeth, an attorney in Edina, Minnesota. “I often wish they’d been able to speak up while their parents were still alive.”

Wouldn’t sharing an estate plan with family members open the individual or couple to potential arguments and debates? Buckley agrees that there could be hurt feelings or conflicts. “But if there’s an unequal distribution or a disinheritance, at least people know what’s coming,” she points out.

That may create additional friction, but it also allows for conversations about what’s equitable (more on that below) and/or desirable. Kolmetz recounts a story about a family where a set of antique china wasn’t in dispute (one sibling wanted it, the other didn’t). But the cost of storing the delicate items became a point of contention — and could have easily been sorted out before the parents passed. “I’m in favor of being transparent when it helps resolve important questions,” he says.

That said, warns Spaeth, “You don’t necessarily want your estate plan to become a family affair.” In some cases, it may be better to keep your plan private, especially if you think your loved one won’t be able to resist the desire to give their opinion or push their own agenda (see the TV series Succession for reference).

Failing to let others know what you consider 'fair'

The challenge. It is a truth universally acknowledged, or close to it, that parents rarely distribute their assets evenly among their children while they’re alive. One child may have gotten help with debt, a down payment on a home, graduate school or support for medical or mental health issues that another sibling didn’t. The scenarios are endless, and the shadow of “this one got more” can quickly derail a couple’s estate plan, says Ashley Agnew, a senior wealth adviser and certified financial therapist in Needham, Massachusetts.

What to do. The key, says Agnew, is to figure out what’s fair — for you and your family. “There truly are no right answers for dividing your assets,” she says. “What’s equal isn’t always equitable. For most people, ‘fair’ is a feeling, not a fact.”

That’s not to say that allocating your assets evenly between your children is the wrong way to go. A mathematical split among your heirs can keep things simple on one level, without trying to rectify the imbalances of the past. In most cases, though, these are hard choices that require compassionate conversations, says Kolmetz. “Often, what’s holding up a couple’s plan isn’t the dollar amounts; it’s that they each need to express what fairness means to them. What did ‘being fair’ look like in their own families growing up? How does that translate to their own children and grandchildren now?”

The issue of fairness comes up in force with blended families, Agnew notes, making open conversations even more important. For example, she says, if a couple is in a second marriage, and one spouse has two children from a prior marriage. In contrast, the other has three. Should the assets of each spouse be divided equally only among their biological children?

Shaila Buckley agrees that exploring what’s fair and equitable — even when it’s uncomfortable — can help prevent far worse outcomes later on. “You absolutely have to put in time to have these discussions before someone dies, because this is the single most common type of litigation in estate planning.”

4. Worrying too much about estate taxes

The challenge. Another common cause of handwringing and confusion when setting up an estate plan is the impact of taxes, says Buckley. If you have a large estate, it could face federal taxes on the total fair market value of all assets at the time of your death (including real estate, investments, retirement accounts, cash and more).

In addition, 11 states and the District of Columbia (Connecticut, Hawaii, Illinois, Massachusetts, Maine, Minnesota, New York, Oregon, Rhode Island, Vermont and Washington) also levy estate taxes, and five more have an inheritance tax levied on beneficiaries (Iowa, Kentucky, Nebraska, New Jersey and Pennsylvania). Maryland takes a bite coming and going with both an estate tax and an inheritance tax.

What to do. While the ultra wealthy will need to consider estate and inheritance taxes, most people won’t, says Buckley. “Most people don’t understand that they’re not going to pay any estate taxes unless their estate is worth more than $15 million as an individual, and $30 million as a couple [for 2026]. So most people don’t even have to plan for estate taxes anymore.”

In fact, many people don’t realize that in both community property states and common law states, there is a step-up in basis for investments and real property, which can provide a substantial tax break for heirs, says Buckley. Say you bought 100 shares of Apple stock 20 years ago, at $10,000, and when you died, the fair market value of the stock was $100,000. If you sold the stock the day before you died, you’d owe capital gains on the profit: $90,000. But after you die, your heirs wouldn’t owe capital gains on that $90,000.

5. Relying on AI to write your plan

The challenge. A scourge of these high-tech times, estate planners say, is the temptation to use online or AI-generated estate plans. “They’re horrendous, and most people don’t know what they’re doing when they use these services,” says Buckley.

While these options may seem efficient and inexpensive, you or your heirs could end up spending far more time and money unraveling what these documents do and don’t cover. “The main issue is that these services aren’t state-specific and often misuse legal terms,” adds Spaeth, “which could trigger a formal probate proceeding, which would greatly increase the cost of administration.”

What to do. Buckley acknowledges that it may sound biased for an estate attorney to recommend using … an estate attorney, “but you really want the expertise that a trained estate lawyer can provide.”

Note: This item first appeared in Kiplinger Retirement Report, our popular monthly periodical that covers key concerns of affluent older Americans who are retired or preparing for retirement. Subscribe for retirement advice that’s right on the money.

Read More

• Estate Planning Checklist: 13 Smart Moves
• Your Estate Plan Needs an Advance Directive for Dementia
• Revocable vs Irrevocable Trust: It Comes Down to Control vs Protection
• 10 Things You Should Leave Out of a Will According to Experts
• Wills Gone Wild: How to Avoid Estate Planning Disasters

Answer: It sounds like you did an excellent job of teaching your son how to work hard and save money. At 65, however, you have a better sense of the sacrifices required to amass such wealth.

The average 401(k) balance for Fidelity account holders age 60 in 2025 was $255,200. That data is limited, as it only draws from the 401(k) plans Fidelity administers. But the Federal Reserve, which has far more comprehensive data in its 2022 Survey of Consumer Finances, says that as of three years ago, the average retirement savings balance among Americans ages 65 to 74 was $609,230.

The takeaway? The typical older American has a pretty modest nest egg. If you managed to amass $7.8 million in savings by 65, you clearly surpassed most retirees in that regard.

The benefit of having such a large nest egg is enjoying more financial freedom in retirement. Want that lake house you never bought? Go for it. It might cost a fraction of your wealth. That $12,000 luxury watch you’ve always coveted? At this stage of life, there’s no reason not to splurge if it brings you joy.

What if your $7.8 million nest egg came at the cost of pushing yourself too hard to save and not enjoying life enough along the way? It’s a mistake you might not want your own adult child to repeat.

Still, you might not want to discourage your son in his 40s from saving aggressively. Rather, it could pay to focus on helping him strike a better balance than what you managed to achieve.

It’s important to look at the big picture

If you see your son adopting similar habits to you — denying himself certain enjoyments to sock away every last penny — then you might be eager to help him avoid reaching retirement age with a bucket of regrets. Before you discourage your son from saving at an aggressive pace, recognize that you can’t predict what his costs will look like in retirement, and how much of a cushion he’ll ultimately need to feel secure.

As Stephanie Sherman, CFP and financial planner at Prudential Advisors, says, “There are lots of variables to consider that can impact how long savings will last in retirement.” These include annual cash flow needs, inflation, income taxes, and portfolio returns, she explains.

Rather than suggest that your son cut back on savings, a better bet might be to encourage him to work with a professional to determine how much savings he’ll need and whether he’s taking the right approach.

Sherman says that in the course of retirement planning, it’s important to consider all income sources, including Social Security and pensions. From there, it’s easier to see if you’re over-saving, not saving enough or right on target.

She also says that in this situation, you might be in a position to gift some of your excess savings to your son.

That's particularly easy with the passage of the 2025 tax bill, which extends and raises the lifetime gift tax exemption to $15 million in 2026. That means you can gift up to $15 million in your lifetime, as long as you file IRS Form 709 for any amount above the annual limit ($19,000 in 2025).

Such a large gift could also reduce your son's estate tax burden if you live in one of the states that levies estate or death taxes. Ultimately, a substantial gift or inheritance could have a huge impact on his savings needs and plans, so that’s something to discuss.

All told, Sherman says, the best guidance you might be able to give your son is to look at the big picture and make sure his savings plan is comprehensive.

“Perhaps your son shouldn’t save less, but can adjust his savings strategies to be more efficient,” she suggests.

Understand that everyone’s needs are different

To you, a $7.8 million retirement nest egg might seem like overkill. But your son might have different long-term financial needs than you do.

As Nesrine Jabbour, founder/director at Pretium Wealth Management, says, "It’s rare to hear someone say they’ve saved too much." But, she continues, "Not everyone’s retirement is the same, and we simply do not know the expenses that will arise."

A general rule of thumb Jabbour uses for retirement readiness is to have around 20 times your desired annual income in investable assets.

"For someone targeting $250,000 a year in retirement income, $5 million would typically suffice," she explains.

At $7.8 million, you most likely have more than enough to maintain your lifestyle, preserve purchasing power, and still leave a meaningful legacy. But because you don't know what your son's needs will entail, you don't necessarily want to tell him to save less.

Jabbour recommends that workers today sock away at least 20% of their income. If your son is saving more, she says, "encourage him to define what 'enough' looks like."

Don’t turn a success story into a failure

If you feel you made too many sacrifices to get to a $7.8 million nest egg, it’s natural to want your child to avoid the same trap. But recognize that you’ve achieved a remarkable feat — and reward yourself for it rather than bemoan it.

As Stephen Day, Ph.D., director at Virginia Commonwealth University's Center for Economic Education, says, “Having several million dollars available in retirement is great because you can leave a legacy, support causes you care about, and set your children up for financial security.”

However, if you recognize that saving all that money came at the cost of your day-to-day life, then that’s something you may want to warn your son about — and help him develop strategies to strike an ideal balance.

"I've always been a great saver. But there were times where I should have been more generous,” Day shares. “I've had to teach myself how to be more generous over time. I'm still on track for a solid retirement, but I've also taught myself when to spend when the time is right."

Your son might need a similar wakeup call if you feel he’s pushing himself too hard and not making the most of his money in the near term. But you can frame that conversation in a way that celebrates your accomplishment without belittling the value of having a very large amount of savings.

Read More

• Are You Rich? The Average Net Worth by Age
• The Die With Zero Rule of Retirement
• I Have to Take a $22,000 RMD by the End of the Year, and I Don't Need the Money. What Should I Do With It?
• I'm 60 with $4 Million — Can I Have a Luxury Retirement?

But the mechanics of this transfer within individual families are equally important, especially if heirs aren't logistically or mentally prepared to inherit a large sum.

Despite its significance, only 31% of Americans have a will, even though 83% recognize the importance of estate planning, according to Trust & Will's 2025 Estate Planning Report. This disconnect leaves many families vulnerable to confusion, conflict and financial missteps.

Kiplinger's Adviser Intel, formerly known as Building Wealth, is a curated network of trusted financial professionals who share expert insights on wealth building and preservation. Contributors, including fiduciary financial planners, wealth managers, CEOs and attorneys, provide actionable advice about retirement planning, estate planning, tax strategies and more. Experts are invited to contribute and do not pay to be included, so you can trust their advice is honest and valuable.

Preparedness is key. Here's what older generations should do now to best position their heirs for success.

Make a plan

Making a clear estate plan with the help of a professional is the first step. For instance, at this stage it could be smart to consider a living trust to manage and protect your assets while you're alive and distribute them to your chosen beneficiaries after you're gone.

Also ensure that your estate plan designates power of attorney and includes an advance health care directive so that your family knows what medical interventions (if any) you want.

If you have preferences about your funeral arrangements or burial, make sure to include those, too. It can lessen the burden on your family during a stressful time if there's already a clear plan in place.

Finally, don't forget the basic logistics. Make sure your estate plan includes:

• Log-ins for bank, retirement and investment accounts
• Keys to safe-deposit boxes and/or safes (along with a list of contents)
• A list of real estate properties and information about where to find the deeds
• Copies of insurance policies, including the name and phone number of the person to call when cashing them in
• Tax returns
• Recurring bills or services to be canceled
• Outstanding debts or loans

Communicate your wishes early

One of the biggest hurdles to a seamless transition? Family bickering about assets and sentimental objects. No one wants their heirs to end up like the Jarndyce family in Charles Dickens' Bleak House, throwing away a fortune on years of drawn-out probate cases.

The best way to nip this in the bud is to discuss your estate plan in detail with your entire family so that everyone understands who's getting what (and why, if needed). With the family's blessing, the process of divvying up your estate should become an easier process when the time comes.

Many families avoid these conversations because they're an emotional minefield, but they're essential. Talking about your plan now can help identify gaps or issues that need to be addressed or conflicts that will require further discussion.

On the other hand, waiting until the situation is dire could cause expensive and time-consuming complications— not to mention emotional distress — for your family.

Leave an ethical will

A younger generation should inherit more than just wealth. They also need the wisdom of earlier generations who earned and stewarded those assets so that heirs can eventually pass wealth onto their children.

An ethical will can help you do that. Contrary to a legal document, an ethical will is a statement of values, a compendium of stories and lessons learned that can help steer your family in the right direction long after you're gone.

The content can vary from "here's what's really important in life" to "smart strategies for spending" — whatever will serve your family best. There are plenty of prompts available online to help you get started.

The medium can be flexible, too. Some people prefer to write letters, while others might want to leave a video or audio file. I've seen a grandfather record conversations with his granddaughter, eventually collecting and compiling them to serve as his ethical will.

Looking for expert tips to grow and preserve your wealth? Sign up for Adviser Intel (formerly known as Building Wealth), our free, twice-weekly newsletter.

Remember, this is a chance to speak not just to your children or grandchildren, but future generations you'll never meet. Think about what advice you wish you'd received, the traditions that are important to you or lessons you learned the hard way, then share this wisdom with your descendants.

Prepare your heirs

When the Great Wealth Transfer hits an individual family, it's a deeply emotional and messy process. The more that older generations prepare their successors — practically and emotionally — the better equipped they'll be to address the logistical and ethical responsibilities that come with their newfound wealth.

With clear instructions and all assets accounted for, the transfer itself can be smooth, allowing loved ones to focus on grieving and honoring your memory. The key is to start preparing today.

This article, which has been written by an outside source and is provided as a courtesy by Stephen B. Dunbar III, JD, CLU (AR Insurance Lic. #15714673), Executive Vice President of the Georgia Alabama Gulf Coast Branch of Equitable Advisors LLC, does not offer or constitute, and should not be relied upon, as financial, tax, accounting, or legal advice. Equitable Advisors LLC and its affiliates do not make any representations as to the accuracy, completeness or appropriateness of any part of any content hyperlinked to from this article. Your unique needs, goals and circumstances require the individualized attention of your own tax, legal, and financial professionals whose advice and services will prevail over any information provided in this article. Stephen B. Dunbar III offers securities through Equitable Advisors LLC (NY, NY 212-314-4600), member FINRA, SIPC (Equitable Financial Advisors in MI & TN), offers investment advisory products and services through Equitable Advisors LLC, an SEC-registered investment adviser, and offers annuity and insurance products through Equitable Network LLC (Equitable Network Insurance Agency of California LLC). Financial professionals may transact business and/or respond to inquiries only in state(s) in which they are properly qualified. AGE-8395942.1(09/25)(exp.09/29)

Related Content

• The Six Estate Planning Steps Every Blended Family Must Take
• An Attorney's Guide to Your Evolving Estate Plan: Set-It-and-Forget-It Won't Work
• Protect Your Family's Future: Avoid These 12 Common Estate Planning Mistakes
• A Financial Expert's Three Steps to Becoming Debt-Free (Even in This Economy)
• This Is What You Really Need to Know About Medicare, From a Financial Expert

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

What’s often overlooked is that this retirement savings strategy provides the same tax-friendly perks to heirs — making a backdoor Roth IRA a strategic estate planning tool for high earners looking to secure their wealth legacy. That’s especially true for wealthy folks who don’t open an IRA for their own retirement, but rather with their heirs in mind.

“It’s a great estate planning technique because your beneficiaries can also take tax-free withdrawals whenever they take money out of the account after you pass,” said James Ciamacco, senior financial advisor at Wescott Financial Advisory Group.

What is a backdoor Roth IRA?

A backdoor Roth IRA is a term to describe the strategy of converting nondeductible contributions in a traditional IRA to a Roth IRA.

A Roth IRA, of course, offers a key perk that traditional IRAs do not: tax-free withdrawals.

The catch? There are income limits that preclude folks who earn too much from contributing directly to a Roth IRA via “the front door.” In 2025, for example, you’re not eligible to contribute to a Roth IRA if you are a single filer with modified adjusted gross income (MAGI) of more than $165,000 or are a married couple filing jointly with a MAGI over $246,000.

Enter the backdoor Roth IRA.

This loophole gives wealthy savers access to a Roth IRA and dodges the IRS’s income restrictions. It also enables them to pass on assets in the Roth IRA — and the tax-free growth and tax-free withdrawals these retirement accounts offer — to named beneficiaries. Since Roth IRAs are not subject to required minimum distributions (RMDs), the original account holder can keep the money growing tax-deferred longer, boosting the size of the eventual nest egg an heir will inherit.

How a backdoor Roth IRA works

There are a few more steps to open a backdoor IRA than a standard one.

First, open a traditional IRA and fund it with non-deductible after-tax dollars (not pre-tax dollars). A non-deductible IRA has no income limitations. Next, convert the traditional IRA to a Roth IRA soon after. Since you didn’t get a deduction on the contributions to the traditional IRA, you’ll have zero taxes on the conversion amount, although you are subject to tax on gains. (To prove your initial IRA deposits were made with after-tax dollars, you’ll need to fill out Tax Form 8606.)

Be aware, however, that you may have to pay taxes on a portion of a backdoor Roth conversion if you also have IRAs with contributions made with pre-tax dollars, as the IRS treats all IRAs as one pool of assets. The so-called “pro-rata” rule adds complexity to the calculation, so it’s best to get clarity from a tax professional or financial adviser.

Contributions through the so-called backdoor are subject to the same limits as other IRAs. In 2025, the max is $7,000 for savers younger than 50 and $8,000 for those 50 and older.

How a backdoor Roth IRA benefits heirs

Tax-free growth. If you inherit a Roth IRA, the money grows tax-free, allowing the account balance to potentially grow over time due to the appreciation of the assets held in the Roth IRA.

Tax-free withdrawals. The wealthy retirement saver who does a backdoor Roth IRA is passing on the benefits of their Roth IRA directly to named beneficiaries.

“Are you setting up a retirement account with your loved ones in mind? You might rejoice to find out that your heirs get to inherit your Roth IRA tax-free,” Craig Parker, assistant general counsel at Trust & Will, noted in a blog post.

Let’s say the heir is a daughter in her thirties and thus in her prime earning years. Unlike a traditional IRA withdrawal, which is taxed as regular income and could, as a result, boost income enough to push the daughter into a higher tax bracket, the Roth withdrawal will be tax-free.

Ciamacco says he has had clients in their prime earning years who inherit a large traditional IRA balance and end up bumping up into higher tax brackets and end up paying as much as 32%, 35% or 37% in taxes. “Distributions with accounts funded with tax-deductible contributions can really spike your tax bill,” said Ciamacco. Doing a backdoor Roth IRA eliminates those types of dreaded tax bills, he says.

Tax-free withdrawals are especially powerful given the so-called 10-year rule put into effect by the SECURE Act. This rule requires most non-spouse beneficiaries of inherited retirement accounts to withdraw the entire balance within 10 years of the original owner’s death. So, the tax-free nature of the Roth IRA withdrawal becomes far more valuable to the heir when taking distributions.

Spouses who inherit a Roth IRA can roll it over into a Roth IRA in their own name.

Diversifies tax treatment of retirement portfolio. The more withdrawal options an heir has when it comes to retirement accounts and other investment accounts, the better.

“A Roth IRA can also help you access new options to diversify your taxes,” said Trust & Will’s Parker.

Withdrawals from a traditional IRA or 401(k), for example, are taxed at your regular income rate. Distributions from taxable brokerage accounts are taxed at the lower long-term capital gains rate of 0%, 15% or 20%. In contrast, the Roth IRA allows you to access your money without paying any taxes.

“When it comes to backdoor Roth IRAs, the estate planning piece is one of the main benefits,” said Christian DiRusso, senior financial advisor at Altfest Personal Wealth Management.

Read More

• Qualify for Roth IRA Contributions by Lowering Your Income
• Should You Convert a Traditional IRA to a Roth After 60?
• IRA Conversion to Roth: Rules to Convert an IRA or 401(k) to a Roth IRA
• Six Changes to IRAs and 401(k)s in 2025

Families are diversifying into unfamiliar sectors, reassessing jurisdictional choices and professionalizing their operations at a faster pace than ever before, according to TMF Group's recent report on private wealth and family offices.

For family offices, building in resilience to rising global risk is no longer just about wealth preservation; it is about ensuring that operations, governance and structures can withstand turbulence while being able to take advantage of new opportunities.

Kiplinger's Adviser Intel, formerly known as Building Wealth, is a curated network of trusted financial professionals who share expert insights on wealth building and preservation. Contributors, including fiduciary financial planners, wealth managers, CEOs and attorneys, provide actionable advice about retirement planning, estate planning, tax strategies and more. Experts are invited to contribute and do not pay to be included, so you can trust their advice is honest and valuable.

Here are 10 practical steps family offices are considering to strengthen their resilience.

Step No. 1: Diversify beyond the familiar

Traditionally, wealthy families have tended to concentrate on sectors they know well, such as real estate, infrastructure and energy.

Today, they are diversifying into areas like AI, digital assets, renewables and sustainable agriculture. These industries present unfamiliar risks, but also potential for growth and relevance to next-generation priorities.

The challenge is to avoid "blind diversification" driven by headlines rather than due diligence. Families that succeed with diversification have often started by co-investing with partners who have sector expertise, or by hiring managers with direct operational knowledge.

The goal is to reduce concentration risk while also learning how to operate effectively in emerging or unfamiliar sectors.

Step No. 2: Choose jurisdictions for stability, not just tax advantages

Tax planning remains important, of course, but family offices increasingly weigh institutional stability, rule of law, transparent rules and enforceable cross-border agreements when deciding where to invest.

Family offices that prioritize these attributes gain predictability and reduce exposure to sudden regulatory shifts.

For example, for non-U.S. citizens looking to set up in the U.S., potential changes to income and estate tax thresholds create uncertainty on whether the cost of a U.S. residency (in pure tax terms) could rise.

As part of a broader assessment, however, jurisdictions that offer clarity and enforceability often prove more valuable in the long term than those offering only short-term fiscal advantages.

Step No. 3: Build governance frameworks that go beyond tradition

Traditionally, many family offices have historically relied on a patchwork of advisers — lawyers, investment managers and accountants — without integrated oversight.

The move toward an enterprise-level governance framework helps families coordinate decision-making, ensure compliance across borders and safeguard their reputation.

Family offices are building up resilience by establishing independent boards, defining formal reporting lines and conducting regular audits.

Some also create family constitutions or charters to clarify decision-making authority across generations.

Such measures reduce the risk of disputes and ensure continuity even when leadership changes unexpectedly.

Step No. 4: Professionalize talent

A key driver of resilience is the calibre of the professionals managing family office operations. Family offices are increasingly appointing chief executives, financial officers and compliance specialists with international experience.

The challenge, however, is retention: Competition for senior talent is intense, especially in hubs such as Dubai, London and Singapore.

For family offices still building scale, employing a full-time, in-house executive team may be premature. In this case, drawing on external expertise for specific functions can provide institutional-grade professionalism without the cost or commitment of hiring in-house.

Family offices can test new markets or sectors — with proper governance in place — while retaining the flexibility to expand later.

Once the scale of investments justifies it, responsibilities can be transitioned to permanent staff.

In practice, many family offices combine in-house leadership with targeted outsourcing for specialist support to ensure resilience.

Step No. 5: Incorporate next-generation values into long-term strategy

Successors to family wealth are often more focused on ethical and sustainable investment priorities, and their interest in impact investing, green business and philanthropy is not a passing trend.

Integrating these values into the family's long-term investment strategy ensures smoother generational transitions and helps protect against future reputational risk.

Looking for expert tips to grow and preserve your wealth? Sign up for Adviser Intel (formerly known as Building Wealth), our free, twice-weekly newsletter.

One practical approach that some family offices apply is to create parallel investment portfolios that allocate a defined share of capital to ethical, socially focused and responsibly governed businesses.

This enables younger family members to take a hands-on role, without disrupting the overall wealth strategy, while giving the family office a structured way to evaluate the performance of responsible investments.

Step No. 6: Take philanthropy seriously as an operational activity

Often, family members — especially younger ones — want to be actively involved in philanthropy, rather than simply making passive donations. Establishing charitable trusts, setting clear governance rules and measuring social outcomes can make philanthropic ventures more effective.

The growth of family-run charitable trusts reflects a shift from one-off giving to structured, multigenerational impact.

Offices that treat philanthropy with the same rigor as other investments — by tracking outcomes and appointing skilled managers — find that this strengthens family cohesion while also enhancing public reputation.

Step No. 7: Keep ahead of compliance complexity

Compliance requirements, from anti-money-laundering rules to inheritance tax policies, vary widely and can evolve quickly. Building resilience into family offices means treating compliance not as an administrative burden, but as a core function.

This involves setting up internal compliance capabilities or engaging independent external providers who understand local regulatory environments.

A proactive approach that includes monitoring legislative pipelines and running regular compliance audits can prevent costly remediation later. It also reassures regulators and counterparties that the family office is operating transparently and responsibly.

Step No. 8: Embrace technology for oversight and transparency

As family offices expand across jurisdictions, digital tools that provide centralized oversight of entities, reporting obligations and operational risks are becoming essential. Cloud-based platforms can consolidate data, track compliance deadlines and provide real-time insight into global operations.

Technology also enables families to maintain transparency with multiple generations. Secure portals can enable family members in different regions to access up-to-date financial reports, philanthropic updates and governance documents.

This reduces misunderstandings and keeps all stakeholders aligned, even when they are geographically dispersed.

Step No. 9: Foster collaboration with peers and partners

Family offices are increasingly pursuing joint ventures with other family offices when entering unfamiliar industries or regions. This builds resilience by spreading risk, pooling expertise and accelerating learning.

Collaboration also extends to professional advisers — such as administrators, trustees and compliance specialists — who provide vital infrastructure for offices that cannot build every function in-house.

Step No. 10: Stress-test structures with scenario planning

Political disruption, regulatory changes and new trade policies can happen overnight. Uncertainty around tariffs, for example, has already disrupted private equity funds that depend on international supply chains.

Increasingly, family offices are using scenario planning and risk-weighted models to test the impact of multiple outcomes, such as new tax policies, capital flow restrictions or market shocks.

This kind of what-if analysis not only highlights vulnerabilities, but also enables family offices to build playbooks for rapid response.

For instance, knowing in advance which jurisdictions offer fast-track relocation options, or which structures provide the best protection in the event of sudden regulatory changes, can make all the difference.

Resilience in family offices is no longer just about weathering storms: It is about building operational strength, professional talent and governance models that adapt to shifting compliance needs and changing expectations of next-generation investors.

Family offices that take a structured approach — choosing stable jurisdictions, investing in governance, embracing professionalism and aligning with ethical priorities — will be better placed to thrive in an unpredictable world.

Related Content

• Nine Types of Trusts for High-Net-Worth Estates
• Average Net Worth by Age: How Do You Measure Up?
• What Is a Good Inheritance? Six Great Assets to Inherit
• Estate Planning for Millionaires
• Wealth Transfer Is About More Than Just Money

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Enacted on July 4, 2025, the Trump/GOP spending bill, sometimes referred to as the One Big Beautiful Bill (OBBB), permanently extended several temporary federal tax provisions. Among these changes is an increase in the estate exemption amount to a higher base threshold.

With next year's higher exemption amount, heirs might receive a potentially lower federal tax bill. But there might be an increase in taxes for some high-income earners.

Here's more of what you need to know.

Related: Ten Retirement Tax Plan Moves to Make Before December 31

Estate tax exemption 2026

The federal estate tax doesn’t apply unless you hit a certain exemption amount. Thanks to the OBBB, the exemption remains high, and the IRS has increased the exemption to the amounts below for 2026:

• The exemption for people who pass away in 2026 is $15 million (up from $13.99 million for the 2025 tax year).
• Married couples can expect their exemption to be $30 million (up from the current $27.98 million for 2025 taxes).

Federal estate tax rates

Due to the higher 2026 exemption amount, only a certain percentage of estates will be subject to the federal estate tax.

However, estates valued above the tax amount will be taxed at a pretty hefty rate, with those exceeding more than $1 million ($16 million or $31 million combined for married couples) taxed at 40%.

Below is how much heirs can expect to pay based on an estate’s value:

The estate tax exemption is also indexed for inflation.

State estate tax rates

Some states might impose an estate tax of their own (and the exemption amounts aren’t always as generous as the federal estate tax exemption).

For instance, in Massachusetts, the state estate tax exemption is just $2 million and isn’t indexed for inflation.

A few states also impose an inheritance tax, which can leave a tax bill for your heirs on even small amounts of money.

Nebraska, for example, imposes an inheritance tax on adult children when their inheritances exceed $100,000. In Kentucky, nephews and nieces only receive a $1,000 exemption.

Individual AMT phaseout threshold lowers in 2026: Will you have to pay AMT?

Before the Tax Cuts and Jobs Act (TCJA), 5.2 million Americans paid the Alternative Minimum Tax (AMT), per Tax Policy Center data. This "parallel tax system" was implemented to ensure that higher-income taxpayers pay a minimum amount of tax.

However, through the TCJA, the individual AMT threshold was raised in a couple of ways:

• Increasing the exemption amount from $84,500 to $137,000 for married filing joint couples (single filers from $54,300 to $88,100).
• Raising the phase-out threshold from $160,900 to $1,252,700 for married filing joint couples (single filers from $120,700 to $626,350).

The result was that the number of taxpayers who paid AMT dropped from about 5 million to just 200,000 in 2018, according to the Tax Policy Center. Under the OBBB, the individual AMT exemption amounts were made permanent.

But starting in 2026, the phaseout will be lowered to $500,000 for singles and $1 million for married couples filing jointly. Once more, the phaseout rate for every dollar above this threshold was increased from 25% to 50%.

This means more income from higher earners will be subject to AMT next year.

Even if you haven't paid AMT in recent years, you might start paying this alternative tax in 2026 if you're a high-income earner.

Read More

• States That Won't Tax Your Death
• Here's Why Nearly Half of Heirs Can’t Keep Their Inherited Home
• Big GOP Tax Bill Could Change Your Estate Planning
• Test Your Retirement Tax IQ: How Much Do You Know?

Major life events often require changes to your estate planning documents. We often tell clients to remember the five D's: dependents, divorce, downsizing, disability and death.

Any of these events can quickly make an estate plan outdated, which is why a one-size-fits-all will isn't enough. In this article, we'll take a closer look at the backbone of any good plan — your will.

Kiplinger's Adviser Intel, formerly known as Building Wealth, is a curated network of trusted financial professionals who share expert insights on wealth building and preservation. Contributors, including fiduciary financial planners, wealth managers, CEOs and attorneys, provide actionable advice about retirement planning, estate planning, tax strategies and more. Experts are invited to contribute and do not pay to be included, so you can trust their advice is honest and valuable.

What is a will?

A will is a legal document that instructs your personal representative (also known as an executor) on how your affairs should be handled upon your passing.

It can be as simple as directing where certain assets should go or more involved, such as nominating a conservator and guardian for your minor children and holding assets in trust for their benefit.

What does your will distribute?

A will distributes your probate assets — items you own in your name alone, with no beneficiary designated. Common examples include a vehicle, personal property or a bank account without a pay-on-death or transfer-on-death designation.

Assets with beneficiary designations — such as checking accounts, savings accounts, brokerage accounts, retirement accounts and insurance policies — pass outside of your will.

If you've ever named a beneficiary for one of these accounts, congratulations: You are an estate planner.

Assets such as checking and savings accounts, CDs and brokerage accounts that are held jointly in your name with another person will, in most cases, pass as a matter of law to the surviving joint owner without being subject to your will.

How does a will distribute your assets?

Let's look at a basic example. John Smith has one checking account with $10,000, one savings account with $5,000, one car and one house. He names his two adult children, Susan and Mark, as beneficiaries on the checking account. His will states that the car should go to Mark, the house to Susan, and everything else should be split equally.

When John passes away, his checking account bypasses the will because he completed the beneficiary designation. Those funds will pass equally to Susan and Mark.

His probate assets — the savings account, car and house — will be distributed according to his will. That means Mark will receive the car and $2,500 from the savings account. Similarly, Susan will receive $2,500 from the savings account and the house.

The total assets distributed to Mark will include $5,000 from the checking account, the car and $2,500 from the savings account. The total assets being distributed to Susan will include $5,000 from the checking account, the house and $2,500 from the savings account.

What happens if you don't have a will?

If you die without a will, you're considered to have died intestate, in which case, state laws determine who gets your assets.

Statutes vary from state to state, but most consider several factors, such as whether you were married, had children, if your spouse was also the parent of your children or if you have living parents or siblings.

If no close family members are found, the law might consider distant cousins.

Looking for expert tips to grow and preserve your wealth? Sign up for Adviser Intel (formerly known as Building Wealth), our free, twice-weekly newsletter.

Dying without a will could not only make your assets go to people you never intended to benefit, but it will also make settling your estate more time-consuming and costly.

For example, both John Denver and Prince died intestate. Denver's estate took six years to settle. Prince's took just as long, draining tens of millions of dollars from the singer's $156 million estate.

Having a will allows you to direct who receives your assets in a timely, cost-efficient manner.

Who is in charge of making sure your will is probated?

Your will names a personal representative — or executor — to manage your estate. This person acts as a fiduciary and is in charge of identifying assets of the estate, paying any valid creditor claims, filing any tax returns (income or estate) that might be required and carrying out tasks related to the administration of the estate, including distributing probate assets according to the terms of the will.

Your choice of personal representative might change over time. Younger individuals typically name a parent, spouse or another close relative or friend. Older individuals typically name a spouse, child or sibling.

The key is to choose someone you trust to carry out your wishes and to revisit your choices periodically. I always recommend choosing an alternate to serve as a personal representative if the primary choice is unable to serve for any reason (for example, incapacity, death or refusal).

If these roles aren't filled, additional time will be required to find someone to be appointed to these positions, and with additional time comes additional legal fees.

You can also nominate a guardian and conservator for your minor children. They would raise your children and manage their finances, respectively, if you were to pass away while they're still minors.

Anyone can serve in either of these roles; however, it's important to have a conversation with any individual nominated. I always suggest that you name an alternate choice in case your first choice is unavailable.

How you can prepare

With the introduction of artificial intelligence and several online platforms, many people wonder if they even need an estate planning attorney. The answer is an unequivocal yes.

Online estate planning services are growing in popularity due to their low cost and convenience. However, wills are technical documents, and specific statutory and legal requirements must be met to be valid and enforceable.

Working with an attorney who is licensed in your state might cost more upfront, but it ensures that your will is legally sound and enforceable.

There are several resources to help you find an attorney. Call your city, county and state bar associations, and they can provide you with a list of attorneys who focus on estate planning.

Additionally, if you have a financial adviser, either independently or through your place of employment, they might recommend an estate planning attorney who can assist you.

Lastly, many community centers, senior centers and local nonprofit organizations will have estate planning presentations and seminars, typically open to the public and often free of charge.

This affords you the opportunity to learn more about estate planning while meeting an estate planning attorney who might be able to help you.

Before your first meeting

Once you've chosen an estate planning attorney, here are some things to consider before your first meeting:

Compile a list of your assets, both tangible and intangible.

If you have assets that allow for beneficiary designations, confirm what the current beneficiary designations are.

Think about whom you would like to serve as your personal representative and guardian/conservator of your minor children. Have a conversation with them to make sure they're willing to serve in such a capacity.

Think about how you'd like your assets distributed upon your passing and how you'd like those assets distributed if your first choice is not available.

Think about any charitable distributions you might like to make. Generally, we recommend these distributions be made with a beneficiary designation, but many individuals prefer to include charitable distributions in their wills.

If you have prior estate planning documents, think about how you'd like those to change when compared with your new estate planning documents. Bring those documents so your attorney can review them and let you know if they need to be modified or revoked.

Are you a beneficiary of another person's estate plan, for example, the beneficiary of a parent's or grandparent's trust? If so, let your attorney know, as this might affect how you structure your own estate plan.

In conclusion

With this information, you and your estate planning attorney can build a plan that accomplishes your goals, as well as let you know about any potential issues that could arise.

Taking the time to make the proper arrangements now — and making timely updates when life brings you one of the five D's — will give you the peace of mind that comes with knowing your wishes will be honored and your legacy preserved.

Related Content

• I'm an Estate Planning Attorney: These Are the Two Legal Documents Everyone Should Have
• How to Choose Your Trustee or Executor of Your Will
• Probate: The Terrible, Horrible, No Good, Very Bad Side of Estate Planning
• Wills Gone Wild: How to Avoid Estate Planning Disasters
• 10 Good Reasons to Revisit Your Will

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

"Is there some way to prevent a financially irresponsible child from squandering his inheritance and winding up on the street or from others trying to take those funds to satisfy debts?"

Kiplinger's Adviser Intel, formerly known as Building Wealth, is a curated network of trusted financial professionals who share expert insights on wealth building and preservation. Contributors, including fiduciary financial planners, wealth managers, CEOs and attorneys, provide actionable advice about retirement planning, estate planning, tax strategies and more. Experts are invited to contribute and do not pay to be included, so you can trust their advice is honest and valuable.

Arthur, who is 85, described his oldest son, "Abel," as "a lifelong, irresponsible deadbeat who owes over $200,000 in past-due child and spousal support. His wages are being garnished, and anytime he puts money in a bank account, it is seized.

"All my assets would total close to a million dollars, and I want to leave everything to my four children equally. Abel wants me to have a family trust written with a 'spendthrift' clause that would completely protect his portion from all of his debts and judgments, including child and spousal support.

"I want to be sure he always has a roof over his head, but if this is true — as to support obligations — his total lack of morality makes me sick. His children did without because of their father being a flake, and my other kids hate him for his selfishness.

"A free family trust planning seminar is being put on next month by what I assume are lawyers who can create a trust for much less than a local estate planning attorney. What are your thoughts, Mr. Beaver? May we talk?"

Don't fall for this scam

When we talked, it was clear Arthur was tempted to attend this "free lunch seminar" that was in reality a traveling "trust mill" scam not conducted by attorneys.

Usually, these seminars are held in hotels and use high-pressure, fear-based tactics on older people to sell them life insurance and other financial products that aren't tailored to their individual needs. They also push completely useless, one-size-fits-no-one living trusts.

"Arthur," I said, "we all want to save money, but a seminar like this isn't the way to develop an estate plan that meets your specific goals. A lawyer whose practice is focused on estate planning is so valuable."

He agreed, and then I asked, "What memory do you want your other children and family to have of you — as being fair to everyone or favoring an irresponsible deadbeat?"

Fair does not mean equal

I noted that it's not written in stone that a parent must give their estate to the children equally. When an inheritance goes to a child whose siblings justifiably consider irresponsible, dishonest and manipulative or simply undeserving, that parent — from the grave — has uncorked a bottle of bitterness that's been aging for years.

"Do you want to be seen as a co-conspirator with someone you clearly have disdain for? I I suspect you've dug into your own pockets to help out his former wife and children. Arthur, tell me I am wrong."

"No, you're so right, Dennis," he haltingly replied, his voice choking with emotion.

What is a spendthrift clause, and how does it work?

My reader is correct that a spendthrift provision in a trust prevents the voluntary and involuntary transfer of a beneficiary's interest — making them unable to give their inheritance to anyone. Most creditors cannot take any of the trust funds.

So, this powerful clause in an estate plan is highly effective in protecting the beneficiary from themselves and others, helping:

• To avoid the inheritance being lost to addiction, gambling and risk of squandering due to impaired cognitive abilities
• To protect beneficiaries who are financially irresponsible, vulnerable to manipulation or facing legal claims
• To preserve family wealth for future generations

Until the assets are distributed, Abel would not own them, and they would remain untouchable by his creditors. It would just take a paragraph in Arthur's estate plan directing that his share of the inheritance go into a trust managed by a trustee.

A trustee, as described by the courts, is a trusted individual or a professional fiduciary.

A trustee could be a family member, but that would be dangerous when we have a con, flake or manipulative sibling who could easily threaten violence unless they're given what they want.

Other uses for a spendthrift clause

Arthur has other options, too. For example, a parent could tack on to a trust certain requirements to meet before a beneficiary can receive a portion of the inheritance, such as:

• Completing high school, college or vocational school
• Remaining employed or actively looking for work
• Verifiably keeping free of drug or alcohol abuse
• Avoiding being convicted of crimes that call for actual time in custody

Particular to beneficiaries like Abel, the beneficiary can be required to:

• Submit and follow a budget approved by the trustee
• Pay down debts and not take on obligations he cannot meet given his income
• Stay current on all support orders

A spendthrift clause is not bulletproof

While a spendthrift clause prevents most creditors from taking trust assets, certain government entities can bypass the protections, and some legal obligations can lead to assets being seized. Some examples:

• Claims for unpaid taxes or fines imposed by government entities
• Criminal fines and restitution in most states
• Unpaid child and spousal support in most states

Also, it's worth noting that once the assets are distributed to the beneficiary, the protection of the spendthrift clause is lost.

Looking for expert tips to grow and preserve your wealth? Sign up for Adviser Intel (formerly known as Building Wealth), our free, twice-weekly newsletter.

Most parents work hard for their families to put food on the table. I do not know any older adults who would knowingly help "an Abel" benefit from an inheritance when he stiffed their grandchildren's mother and the kids.

I am glad that Arthur reached out. It is time for him to retain an estate attorney.

Dennis Beaver practices law in Bakersfield, Calif., and welcomes comments and questions from readers, which may be faxed to (661) 323-7993, or e-mailed to Lagombeaver1@gmail.com. And be sure to visit dennisbeaver.com.

Related Content

• What One Widow's Ordeal Teaches Us About Marriage and Money
• Turning 65 This Year? Here Are 10 Key Things to Know
• How to Plan for Aging in Place: Five Key Factors
• How an Expired Passport Thwarted Blackmail (and What Other Important Documents You Should Keep)
• The Unsung Hero of Aisle 5: A Tale of Forgotten Change and Compassion at the Supermarket

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

In the past week, they've written about the misconceptions many people have about annuities, how Baby Boomers are facing a very different retirement reality than their parents did and the OBBB's impact on federal student loan programs. One also wrote about how families can prepare heirs for their financial legacy to avoid the "third-generation curse."

This quiz is designed to test what you've learned from them. Let's see what you know! (And don't worry if you miss an answer: You can follow the links below the quiz to brush up on your knowledge.)

Related Content From Adviser Intel

These are the Kiplinger stories featured in this quiz:

• I'm a Financial Adviser: Don't Believe These Five Myths About Annuities
• Student Loan Shake-Up: What the OBBB Means for Parent PLUS Borrowers, From a Financial Aid Expert
• Boomer Retirement Reality Check: The Numbers Look Bleak, But Here's What You Can Do About That
• I'm a Wealth Adviser: This Is How to Prevent Your Heirs From Frittering Away the Family Fortune

The problem usually isn't poor investment returns or bad estate planning. More often, wealth erodes because of human nature: lack of communication, lack of purpose and lack of preparation.

The first generation works hard to create wealth. The second generation often helps manage it. By the third generation, children who never saw the sacrifices made to build that wealth may begin to see it as a right instead of a responsibility.

Kiplinger's Adviser Intel, formerly known as Building Wealth, is a curated network of trusted financial professionals who share expert insights on wealth building and preservation. Contributors, including fiduciary financial planners, wealth managers, CEOs and attorneys, provide actionable advice about retirement planning, estate planning, tax strategies and more. Experts are invited to contribute and do not pay to be included, so you can trust their advice is honest and valuable.

To prevent that outcome, families must think beyond spreadsheets and estate documents.

The most successful families invest in three kinds of capital: financial, human and social. Together, these provide a framework for protecting both the money and the meaning behind it.

1. Financial capital: Building a durable structure

Financial capital is the foundation of family wealth: investment portfolios, real estate, business interests and other assets.

But growth alone isn't enough to preserve wealth across generations. Structure matters even more.

As assets are divided among more family members, differing personalities, needs and priorities can create conflict and poor decisions that slowly deplete the financial base.

Practical steps to strengthen financial capital:

Create a long-term financial strategy. A written plan that aligns assets to goals, such as retirement, education and philanthropy, provides direction and prevents money from being spent haphazardly.

Use trusts and other estate planning tools. These structures create guardrails, clarifying how and when wealth will be transferred to future generations. They also reduce uncertainty and conflict.

Communicate the "why." Numbers alone don't motivate. Share with your family how the wealth was built, what you hope it will provide and the values you want carried forward.

One family I worked with used a letter from their grandfather that described the origins of the family business and the hardships of that time. That personal context can help keep the next generation grounded.

Keep the plan alive. Review strategies together periodically. As families expand and circumstances change, the plan should evolve as well.

A strong financial structure is the starting point. Without it, even the best intentions can't prevent wealth from unraveling.

2. Human capital: Preparing the next generation

Money alone does not preserve wealth; people do. Human capital refers to the knowledge, skills and judgment that family members bring to managing both the assets and the responsibilities that come with them. Education and preparation turn passive heirs into active stewards.

Practical steps to build human capital:

Invest in education. Support younger family members in gaining not only classroom knowledge but also leadership, communication and problem-solving skills. A well-rounded education equips them to make sound decisions.

Provide real-world exposure. To give younger generations practical insight into how wealth is managed, offer internships in the family business or opportunities to shadow advisers and participate in investment reviews.

Offer mentorship and guidance. Encourage relationships across generations, pairing younger members with older relatives or trusted advisers who can provide perspective and advice.

Promote cooperation. Not every family member needs to be an expert in every area. Some will gravitate toward business or investing, while others may align more with philanthropy or family governance.

Encourage each person to lean into their strengths and contribute where they add the most value.

When families nurture human capital, they create confident, capable heirs who see themselves as part of a larger legacy rather than passive recipients.

3. Social capital: Strengthening the family fabric

Even with strong finances and capable heirs, wealth can still erode if the family fabric weakens. Social capital is the trust, shared values and sense of connection that binds families together.

When disagreements or rivalries take center stage, the numbers on the balance sheet matter less than the fractures in the relationships.

Practical steps to reinforce social capital:

Lead with purpose. Make it clear that wealth exists to support the family, not divide it. Celebrate achievements together and be intentional about showing support during difficult times.

Stay engaged as a group. Hold regular family meetings that cover not only money but also shared goals, charitable initiatives and values. Invite input from multiple generations so everyone feels included and accountable.

Document the family story. Preserve history through written accounts, letters or recordings. Personal stories about how wealth was built often carry more weight than numbers. They remind younger generations that financial success is tied to resilience and sacrifice.

Encourage shared experiences. Activities like volunteering together, funding a joint philanthropic project or even gathering for annual retreats help strengthen bonds beyond money.

Looking for expert tips to grow and preserve your wealth? Sign up for Adviser Intel (formerly known as Building Wealth), our free, twice-weekly newsletter.

Social capital is often overlooked, but it is what allows financial and human capital to function. Without a sense of connection and trust, even the best-prepared family can drift apart.

Putting it all together

Families that succeed across generations treat wealth as more than numbers on a balance sheet.

They see it as a living legacy that requires constant investment in people, purpose and planning. A few small but consistent practices make the difference:

Start early. Bring younger generations into the conversation as soon as possible. The earlier they learn, the stronger the foundation.

Be intentional. Connect every financial decision to broader family values so money is always serving a purpose.

Measure progress. Track more than investment performance. Measure engagement, education and impact to hold everyone accountable.

Whether it is hosting an annual family meeting, letting children help direct charitable giving, or inviting a finance-majoring grandchild to sit in on an investment review, every step builds connection.

In the end, preserving wealth beyond the third generation is not about money alone. It is about preparing people to carry forward both the financial and personal legacy of the family.

Related Content

• Do You Need a Family Office? Four Signs for the Very Wealthy
• Nine Types of Trusts for High-Net-Worth Estates
• Create a Family Dynasty for Lasting Security
• I'm a Financial Adviser: You've Built Your Wealth, Now Make Sure Your Family Keeps It
• Generational Wealth Plans Aren't Just for Rich People

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Baby Boomers, the largest retirement generation to date, will finish shifting up to $105 trillion to heirs by 2048. And according to a recent LegalZoom survey*, 62% of what will be left behind is anticipated to be real estate or property.

But rising home maintenance costs could pose a problem for younger generations.

For instance, property values have increased “almost 27% faster than inflation since 2020,” per the Tax Foundation. And with higher home valuations, heftier property tax bills typically follow.

So will the inherited wealth be enough to support the higher costs of homeownership? Or will heirs need to sell priceless heirlooms to stay afloat?

Read on.

*Note: LegalZoom is an online legal technology company that surveyed 2,000 U.S. adults, including 1,000 Gen Z and millennials and 1,000 Gen X and baby boomers. Respondents were screened across various income levels.

Related: Could Tax Savings Make a 50-Year Mortgage Worth It?

Heirs may be unprepared for high property taxes and home costs

Per the LegalZoom survey, 42% of Young Americans don’t feel “financially prepared to keep and maintain” an inherited home left to them today. Among their top concerns when inheriting a house include:

• Property taxes. About 47% of potential heirs expect to inherit property, but 20% are concerned they won’t be able to afford the property taxes on the heirloom house.
• Maintenance costs. About 20% of young Americans are concerned about being able to maintain an inherited property after it’s passed down to them (which may include hidden home costs like home insurance and repairs).
• Property debt and legal complexities. Approximately 23% of future heirs are concerned about expensive surprises associated with a home. Mortgages, home equity loans, tax liens, and tricky legalities could intimidate heirs when inheriting a house.

So, while 62% of the older generation(aged 45 and above) surveyed by LegalZoom expect to leave behind real estate to their loved ones, only 18.6% of younger Americans in the survey actually feel “very prepared” to maintain an inherited property.

House-rich but cash poor?

Although inheriting a house may sound exciting, future generations may struggle to maintain a home left in the family will. And that’s not just because home costs are rising.

Other factors contributing to a “house-rich, cash-poor” mentality are generation-specific. For instance:

• According to a recent LendingTree study, Generation X may carry the highest median non-mortgage debt among other generations (including credit card debt, student loans, etc.).
• Millennials may struggle even more with outstanding loans. Over half have more debt than savings, according to a recent Bankrate report.
• Generation Z could face difficulty with overall financial stability. One Deloitte survey* found that 56% of Gen Zers live paycheck to paycheck.

Thus, instead of using an inherited home as a priceless heirloom, future generations may use that real estate to help them pay off debt, which may be disappointing news for those hoping to pass down a family home to be used by future generations.

*Note: Deloitte surveyed 14,468 Gen Zs from 44 different countries.

Start talking to your heirs now: Inheritance tax may be tricky

While talking about wills and estates with your heirs may be uncomfortable, it’s important to take the time now to discuss what the future looks like for your family.

Here are a few tips to get the sensitive wealth transfer talk started in your household:

• Ask your heirs questions about their financial situation. If you feel comfortable, you may want to broach topics like “What do you want your future to look like?” or “What are some of the biggest financial goals or challenges you have?” Creating a customized plan that works for all generations involved will help ensure you know how your assets will be handled after you’re gone.
• Be honest about your own financial situation. Do you still have any outstanding debts? How will taxes on your assets look for your heirs? According to the LegalZoom survey, over 50% of young Americans aren’t confident that they understand how inheritance taxes could affect their inherited wealth — you can help bridge that gap in understanding now.
• Discuss options. If your heirs aren’t very liquid, you may want to talk about the possibility of selling certain assets in the near future. You may also want to offer advice on which investments could be the best fit for their financial situation. Remember: some of the greatest wealth you can pass on to future generations is the wisdom you’ve learned through your own journey, and not just the assets themselves.

Overall, the most important component of family finance is ensuring that the plan works for everyone.

So if you haven’t had a conversation with future heirs about generational wealth, or are worried about taxes affecting your loved ones’ inheritance, make a plan to talk with your heirs and consult with a qualified estate planning or tax professional sooner rather than later.

Read More

• What’s the New 2026 Estate Tax Exemption Amount?
• How the Big GOP Tax Bill Could Change Your Estate Planning
• What is the Gift Tax Exclusion for 2025?
• States That Won't Tax Your Death

If you're sticking to your retirement plan or are currently enjoying the retired life, the provisions in this legislation are worth paying attention to.

Here are four important changes to consider and the steps to take in response.

Kiplinger's Adviser Intel, formerly known as Building Wealth, is a curated network of trusted financial professionals who share expert insights on wealth building and preservation. Contributors, including fiduciary financial planners, wealth managers, CEOs and attorneys, provide actionable advice about retirement planning, estate planning, tax strategies and more. Experts are invited to contribute and do not pay to be included, so you can trust their advice is honest and valuable.

1. TCJA extension: Locking in lower tax rates

The Tax Cuts and Jobs Act (TCJA) rates enacted in 2018 have been extended, preserving lower individual income tax rates and pushing beyond their original 2025 expiration date.

While many of the bill's changes are temporary, extending through 2028 or 2029, the updated brackets are permanent. The Congressional Budget Office estimates these changes will add $2 trillion to the national debt in the next decade.

Supporters see this move as ensuring tax stability, while opponents warn of future tax hikes and cuts to federal programs. In either scenario, it means a change to your retirement plan.

2. Increased standard deduction for older people

The bill introduces a $6,000 increase to the standard deduction for Americans age 65 and older. This enhanced deduction can reduce tax liability on Social Security income.

However, there are two important factors to consider:

• The first is that the benefit phases out for individuals with incomes above $75,000, or joint filers above $150,000.
• The second is that the deduction is temporary, expiring in 2028. This extension of the pre-existing standard deduction means that a qualifying 65-year-old couple could deduct up to $46,700.

3. SALT deduction cap quadrupled (with limits)

The new legislation raises the state and local tax (SALT) deduction cap from $10,000 to $40,000 for households earning less than $500,000.

Looking for expert tips to grow and preserve your wealth? Sign up for Adviser Intel (formerly known as Building Wealth), our free, twice-weekly newsletter.

The aim is to ease the federal tax burden in high-tax states such as California, New York and New Jersey.

These changes are also set to expire in 2029 and similarly do not impact higher earners above the $500,000 threshold.

4. Estate tax exemption increased

In another permanent change, the bill extends the raised federal estate tax exemption to $15 million per individual when adjusted for inflation.

The previous exemption was $5.49 million, adjusted for inflation, and was increased with the TCJA in 2018.

This change enables a much larger sum of wealth to be passed from one generation to another.

The question you should ask: "What do these changes mean for me?"

Here are three considerations.

1. Revisit your withdrawal strategy

Coordinate the distributions from your taxable, tax-deferred and Roth accounts to ensure you're maximizing your after-tax income in retirement.

2. Review estate planning documents

In light of the increased exemption limits, it's time to re-evaluate your existing estate strategy. Trusts, gifting strategies and legacy plans might need to be updated.

3. Plan for legislative uncertainty

Ensure that you understand which updated provisions are temporary and which are permanent. You'll want to make your financial plan flexible enough to adapt to policies that are set to expire, as laws are certain to change in the future.

Navigating complicated policy documents is a near-impossible task for the average individual.

If you find yourself feeling the need to take action but are unsure how to do so, it's imperative that you consult a financial professional to advise you on potential next steps.

When it comes to taxes in retirement, it's not about what you make, it's about what you keep. The most important factor is having a purpose-driven plan and being ready to adapt it as new policies are put in place.

RSG Investments is an investment advisory firm registered with the Securities and Exchange Commission ("SEC") under the Investment Advisers Act of 1940. SEC registration does not constitute an endorsement of the firm by the Commission, nor does it indicate that the adviser or investment adviser representative has attained a particular level of skill or ability. The oral and written communications of an adviser provide you with information about which you determine to hire or retain an adviser. Form ADV Part 2A can be obtained by visiting https://adviserinfo.sec.gov and searching for our firm name. ADV Form 2B is available upon request. Neither the information contained herein, nor any opinion expressed is to be construed as solicitation to buy or sell a security or personalized investment, tax, or legal advice.

Related Content

• New $6,000 'Senior Bonus' Deduction: What It Means for Taxpayers Age 65-Plus
• What the OBBB Means for Social Security Taxes and Your Retirement: A Wealth Adviser's Guide
• New Trump Tax Bill: Five Changes Homeowners Need to Know Now
• How Will the One Big Beautiful Bill Shape Your Legacy?
• How to Maximize Your Social Security Now That the One Big Beautiful Bill Is Law

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

In the past week, they've written about the financial implications of gray divorce, how having a positive mindset a la Ted Lasso can affect your retirement planning and how a widow needed an annulment after she was scammed.

This quiz is designed to test what you've learned from them. Let's see what you know! (And don't worry if you miss an answer: You can follow the links below the quiz to brush up on your knowledge.)

Related Content From Adviser Intel

These are the Kiplinger stories featured in this quiz:

• What One Widow's Ordeal Teaches Us About Marriage and Money
• Are You Getting a Gray Divorce? These Six Financial Strategies Come From a Financial Planner
• The 'Ted Lasso' Effect: A Positive Outlook Really Can Strengthen Your Retirement Plan

The great irony of financial "plans" is that they are the only plan I have come across that isn't actually a plan. In fact, a plan tells you, "Do this, then do that."

But most people don't have a written financial plan that spells things out for them like that.

So, what could your financial plan be missing?

Kiplinger's Adviser Intel, formerly known as Building Wealth, is a curated network of trusted financial professionals who share expert insights on wealth building and preservation. Contributors, including fiduciary financial planners, wealth managers, CEOs and attorneys, provide actionable advice about retirement planning, estate planning, tax strategies and more. Experts are invited to contribute and do not pay to be included, so you can trust their advice is honest and valuable.

1. It's missing an actual plan

Picture this: You've visited your financial adviser and left with a stack of papers filled with numbers and charts. This "financial plan" is basically 100 pages of documents, with the first page telling you whether you have enough for your stated goals. The next 49 pages are cash-flow projections to back up that first page. The final 50 pages are disclosures.

I sort of understand this from a technology and practitioner's perspective. Personal finance is quite personal. Tom and Betty and Carol and Ben may want to retire this year and spend $12,000 per month.

But based on their values, goals, risk tolerance, health, etc., their financial plans should be vastly different. Their decisions and actions are not going to look the same.

In financial planning software, you can adjust spending, retirement age, asset allocation, etc. But none that I have found will spit out a set of instructions based on that. That's the role of your adviser.

In the software we use in my practice, I have a one-page summary called a "dashboard" that I customize with text boxes and to-dos to give our clients an actual plan.

After all, if you go to a personal trainer, you probably want them to tell you what to do.

You can access the free version of what we use online.

2. It's missing a tax and estate strategy

These two areas are widely overlooked by advisers. Unfortunately, this type of planning often comes with much more definitive results than does tweaking a portfolio.

A tax plan for the retired clients we work with has the ultimate goal of reducing their lifetime tax bill. It seeks to realize income when rates are low and defer income during high years. It also weaves its way into portfolio structure, charitable giving and withdrawal strategies.

An estate plan in this context is different than a set of documents, though you still need those documents. You should have a strategy to ensure that your beneficiaries and documents are aligned and that both reflect your wishes.

If you have a taxable estate, it should include strategies to mitigate the tax impact of your passing.

Looking for expert tips to grow and preserve your wealth? Sign up for Adviser Intel (formerly known as Building Wealth), our free, twice-weekly newsletter.

Financial planning software is getting better in these two areas, but other parties have started to fill the gaps. Holistiplan tax planning software allows financial professionals to model and calculate the benefits of various tax plans.

An estate planning software called Vanilla will read your documents, tell you what they say in plain English and then show you the impact of adjustments.

3. It's missing answers to the big questions

Planning software, probably from a liability perspective, is not binary. It is not designed to give red lights or green lights on goals: Yes, you can retire. No, you can't take that trip.

If you're a DIYer using your software, you will have to have a good enough understanding of the inputs and outputs to make decisions based on a Monte Carlo simulation.

If you are paying an adviser, that's their job. If they can't or haven't told you whether you can afford to retire, afford to help your adult children, afford to take that trip, it may be time to find someone who will.

Related Content

• Estate Planning for Millionaires
• Three Pros (and Four Cons) of Hiring Multiple Financial Advisers: The View From a Financial Adviser
• What Is the Magic Number to Retire Comfortably?
• Timing Your Retirement: A Financial Professional's Guide on When to Say When
• Three Steps to Simplify Paying Your Taxes in Retirement

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

In the past week, they've written about the OBBB's impact on retirement and estate planning and how you can ensure your wealth stays in the family when you pass. One also addressed the questions that every early retiree might ask.

This quiz is designed to test what you've learned from them. Let's see what you know! (And don't worry if you miss an answer: You can follow the links below the quiz to brush up on your knowledge.)

Related Content From Adviser Intel

These are the Kiplinger stories featured in this quiz:

• Potential Trouble for Retirees: A Wealth Adviser's Guide to the OBBB's Impact on Retirement
• I'm a Financial Adviser: You've Built Your Wealth, Now Make Sure Your Family Keeps It
• Answers to Every Early Retiree's Questions This Year, From a Wealth Adviser

“Some folks minimize the importance of a beneficiary designation,” said Rachelle Tubongbanua, a private wealth advisor and managing director at U.S. Bank.

But that’s an estate planning mistake.

Choosing and properly designating a beneficiary is a key step in making sure your assets go to the person or people you want them to go to. A beneficiary is the person or entity who will get your assets when you die.

It's not a game of "duck, duck, goose," where any heir can "win" an inheritance; it requires careful thought about who gets what.

Two Keys to Naming a Beneficiary

There are two often overlooked benefits of naming a beneficiary. A beneficiary designation supersedes instructions in a will and trust, meaning the assets will be distributed directly to the named beneficiaries. The other major benefit is that assets are typically distributed to whomever you name as beneficiary without having to go through the costly and time-consuming probate process. Probate is a legal process for distributing the deceased person's assets.

“A beneficiary designation is going to trump anything else that you may have established to pass on assets,” said Sarah Mouser, managing director of financial planning at Verdence Capital Advisors.

And if you forget to name a beneficiary for your retirement account or life policy — or simply don’t get around to it?

“You’re going to go through the probate process,” said Mouser. (Your assets are) going to be tied up. It's going to take longer for those assets to get to who they need to get to. And there's no guarantee that they’re going to pass the way you want them to pass.”

Unfortunately, some clients push off filling out their 401(k) beneficiary forms online when they take a new job, Tubongbanua says. Often they hold off because they don’t have key information at their fingertips,

“They say, ‘let me just wait till next time on log on to add those beneficiary designations,” said Tubongbanua. The problem with such delays is “if a life event such as (the asset owner’s death) were to happen and there’s not a beneficiary designation in place, these assets may go to probate.”

So, whom should you name as your primary beneficiary or your contingent (e.g., secondary) beneficiary in the event your primary beneficiary is not alive at the time of your death?

That’s a personal decision, of course. But beneficiaries are typically your loved ones, such as your spouse, children and grandchildren. Pick who you want your assets to go to after you’re gone.

Six pitfalls to avoid when designating a beneficiary

There are steps you can take – and mistakes you can avoid – to make 100% sure your wishes are met.

Here are six pitfalls to avoid.

1. Not naming a beneficiary

Choosing a beneficiary and making your designation official is easy. There’s no defensible reason not to do so. So, if you get a new job and open a new 401(k) or buy a life insurance policy, do the right thing and take the time to provide your beneficiary's (and contingent beneficiaries') correct legal name and date of birth, as well as any other requested identification such as mailing address, phone number, e-mail address, or Social Security number.

Don't assume that naming a beneficiary in your will is sufficient. If there are no named beneficiaries to, say, a 401(k) or life insurance policy, the proceeds will go to the deceased’s estate and through probate.

And that complicates things and adds uncertainty to how your estate will be settled.

“If there's not a beneficiary designation in place, and those assets do go through probate, that's where it opens up the doors right for those assets to be disputed,” said Tubongbanua.

The legal cost of probate will likely reduce the dollar amount of assets that eventually go to your beneficiaries.

2. Failing to update beneficiary forms after a life event

Big life changes, such as divorce, marriage, or adding a newborn to the family, are good times to ensure all your beneficiary designations are up to date, current, and clearly state your wishes as to who you want your assets to go to. Unless you experience a major life event, financial advisors recommend reviewing your beneficiary designations annually.

The risk of not updating your beneficiaries after a life event is money inadvertently falling into the wrong hands, says Mouser.

“A common pitfall I see is treating beneficiary designations as ‘set and forget,’ ” said Mouser. “People often name a spouse, child, or parent and then never revisit it.”

This snafu often occurs post-divorce. Mouser recalls a late client who had gotten a divorce but never changed or updated the beneficiary on an old life insurance policy that was still in effect at his death. That error cost his second wife, who got zero of the proceeds.

“The client’s beneficiary designation was never updated, and the beneficiary remained the ex-spouse,” Mouser recalled. “All those assets went to her because a beneficiary designation trumps a will” and other estate planning documents.

If you think beneficiary designations are automatically updated after a life change, think again, says Mouser.

“A lot of people just don't think to go back through and update beneficiary designations, especially if they've gone through the efforts of working with an attorney to draft an estate plan,” said Mouser. “They think it's automatically updated, but it’s not.”

3. Naming a minor child as a primary or contingent behavior

The reason not to do this is simple: minors are not of legal age and, therefore, can’t inherit money. As a result, even though the child is named as a beneficiary, a court-appointed guardian will oversee the money until the child becomes an adult, which can be costly, says Tubongbanua.

The "age of majority," when young people are considered adults and can inherit, is 18 in most U.S. states. In Nebraska and Alabama, the age of majority is 19, and it is 21 in Mississippi. If your child is aged 18 to 20, you should also review your state's rules for delaying their inheritance until 21 or later.

It’s also prudent to inform any beneficiaries that they will receive assets upon your death, and to give them an idea of what to expect when attempting to claim the assets, says Tubongbanua.

“We tell our clients to make sure that they’re having family meetings where they can kind of guide the beneficiary through the process and what to expect,” said Tubongbanua. “You don't have to share all the great details (such as dollar amounts), but at least give them some sense of preparation so when that triggering event does happen, they're not caught off-guard.”

4. Failing to name a contingent beneficiary

In the event a primary beneficiary passes away, it’s important to name a contingent beneficiary, such as adult children, to ensure there’s a clear path to inherit, says Mouser. Say you’re married and have two adult children. You could name your spouse as the primary beneficiary, getting 100% of your assets, and designate both of your adult kids as contingent beneficiaries, noting that they will split assets 50/50.

“You should always list a contingent beneficiary,” said Mouser. “You never know what could happen. Listing a contingent beneficiary is really important to avoid probate.”

5. Forgetting to name grandchildren

Families often want to preserve wealth across multiple generations. However, if beneficiary designations only go to children, the grandchildren may miss out on so-called generation-skipping trust-tax-efficient structures, such as dynasty trusts, says Mouser.

6. Overlooking charitable intentions

Tax-deferred IRAs and retirement accounts are highly tax-inefficient to leave to individuals. “But they are ideal (to leave) for charities, since charities don’t pay income tax,” said Mouser. “Many wealthy families miss this opportunity and leave after-tax assets to charity instead, reducing tax efficiency.”

Make a graceful exit

Ensure you consider tax implications when naming beneficiaries.

“You may miss tax-savings opportunities based on how you structure your beneficiary designations,” said Mouser.

When it comes to your estate, making sure you get your beneficiary designations right is just as important as constructing he proper investment portfolio during the accumulation stage of your nest egg, says Mouser.

It’s also important to make sure that beneficiary designations align with your carefully crafted estate plan, adds Mouser.

“You can go through the process of drafting all these documents, and if you don't go through the exercise of updating those beneficiaries where those assets are held, then they're not going to align with the trust (or other estate-planning documents, said Mouser.

Read More

• Probate: The Terrible, Horrible, No Good, Very Bad Side of Estate Planning
• Wills Gone Wild: How to Avoid Estate Planning Disasters
• The Seven Worst Assets to Leave Your Kids or Grandkids

But annual client reviews are more than just routine check-ins — they're a strategic opportunity to deliver value, build trust and uncover new opportunities.

• For clients, these reviews help ensure their financial plans can remain aligned with life changes and market conditions.
• For advisers, they provide a chance to strengthen relationships, introduce new strategies and help grow their business.

By making annual reviews a cornerstone of your practice, you can help position yourself as a trusted partner in your clients' financial journeys while also helping to drive revenue for your firm.

Kiplinger's Adviser Intel, formerly known as Building Wealth, is a curated network of trusted financial professionals who share expert insights on wealth building and preservation. Contributors, including fiduciary financial planners, wealth managers, CEOs and attorneys, provide actionable advice about retirement planning, estate planning, tax strategies and more. Experts are invited to contribute and do not pay to be included, so you can trust their advice is honest and valuable.

Core benefits of reviews

Effective annual reviews should benefit both clients and advisers. They provide a structured opportunity to reassess financial goals, address evolving needs and uncover new opportunities. Here's how these reviews can help deliver value:

1. Strengthening client relationships

• Build trust. Regular reviews demonstrate your commitment to understanding and addressing your clients' evolving needs.
• Provide reassurance. Use these meetings to address concerns, answer questions and provide clarity on financial strategies.
• Showcase expertise. Face-to-face conversations allow you to position yourself as a proactive advocate who helps clients navigate complex financial decisions.

2. Identifying opportunities for growth

• Reassess financial plans. Annual reviews allow you to help uncover gaps or misalignments in your clients' strategies.
• Introduce new solutions. Use the review as a platform to help recommend products or strategies that align with their goals.
• Deliver value. Position the review as a value-added service that goes beyond basic portfolio management.

Key areas to address

Annual reviews are typically most effective when they focus on the areas that matter most to clients. By addressing these key topics, advisers can help ensure their clients' financial plans remain relevant and effective.

1. Annuity optimization

Annuities are long-term tools that can become outdated due to changes in interest rates, inflation or personal circumstances. Regular reviews help ensure they remain aligned with clients' goals.

• Evaluate needs. Assess whether existing annuities still meet the client's financial objectives.
• Explore opportunities. Identify potential rewrites or exchanges to improve payouts or help reduce costs.
• Educate clients. Explain how economic changes, like rising interest rates, impact their annuities.

2. Aligning investment risk with tolerance

Risk tolerance often shifts over time, especially as clients approach retirement or experience life changes. Annual reviews provide an opportunity to realign portfolios with clients' comfort levels.

• Reassess risk profiles. Adjust portfolios to reflect changes in risk tolerance.
• Introduce new strategies. Consider conservative growth options or income-focused investments for risk-averse clients.
• Help ensure alignment. Verify that the portfolio supports both short- and long-term goals.

3. Tax-efficient strategies

Tax laws and financial situations change frequently, creating opportunities for advisers to help clients reduce their tax burdens.

• Review tax situations. Identify strategies like tax-loss harvesting or Roth IRA conversions.
• Optimize accounts. Evaluate the tax efficiency of investment accounts and recommend adjustments.
• Discuss implications. Explain the tax impact of annuities, 401(k)s and other retirement accounts.

4. Enhancing retirement plans and income streams

Retirement readiness is a top priority for most clients. Annual reviews ensure their plans remain on track.

• Assess income strategies. Evaluate Social Security, annuities and other income sources to ensure they meet retirement needs.
• Make adjustments. Recommend changes to address market conditions or shifts in income requirements.
• Maximize 401(k) plans. Review contributions, investment allocations and employer match opportunities.

Goals to establish

A well-structured annual review helps ensure the meeting is productive and client-focused. By setting clear objectives, you can optimize the value of these sessions.

• Evaluate financial goals. Revisit the client's short- and long-term objectives and make changes to address shifting goals.
• Explore new opportunities. Identify potential investment, income or tax opportunities before meeting with clients, then use the review to educate them on emerging financial products or strategies that may be of benefit.
• Position solutions strategically. Introduce new tools, such as annuity rewrites or tax-advantaged accounts, as ways to help clients achieve their goals.

Interested in more information for financial professionals? Sign up for Kiplinger’s new twice-monthly free newsletter, Adviser Angle.

Ways to bolster your business

Annual reviews are also a powerful tool for advisers and can help grow any practice. By leveraging these meetings, you can uncover new revenue and strengthen client retention.

1. Generate new revenue streams

• Identify gaps in financial plans that can be addressed with new products or services.
• Leverage reviews to potentially introduce solutions like annuity rewrites or tax-advantaged accounts.

2. Enhance client retention and referrals

• Regular engagement builds trust and loyalty, leading to long-term client relationships.
• Satisfied clients are more likely to refer friends and family, driving organic growth for your firm.

Tips to take away

To make the most of annual reviews, consider these practical tips:

• Be proactive. Don't wait for clients to request a review — initiate the conversation.
• Personalize the experience. Tailor recommendations to each client's unique circumstances and goals.
• Educate and empower. Use reviews as an opportunity to educate clients on financial strategies and products.
• Leverage technology. Use CRM tools and financial planning software to streamline the review process and provide data-driven insights.
• Follow up. After the review, provide a summary of key takeaways and next steps to keep clients engaged and informed.

Turning reviews into results

Annual client reviews are a win-win for advisers and clients. By prioritizing regular, meaningful engagement, financial professionals can position themselves as trusted partners in their clients' financial journeys while also enhancing their firm's bottom line.

Make annual reviews a cornerstone of your practice, and you'll not only help your clients pursue their goals but also set your business up for long-term success.

Advisors Excel's mission is simple yet profound: to help good advisers become great business owners while enabling their clients to enjoy the retirement of their dreams.

Investing involves risk, including the potential loss of principal. Any references to protection, safety or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the issuing carrier.

Our firm is not affiliated with the U.S. government or any governmental agency. Neither the firm nor its agents or representatives may give tax or legal advice. Individuals should consult with a qualified professional for guidance before making any purchasing decisions. 8/25 — 4733037

Related Content

• Six Big Beautiful Opportunities: Advisers' Guide to Tax and Client Strategies
• Addressing Your Clients' Emotional Side: Communication Techniques for Financial Advisers
• Savvy Marketing Tips for Financial Pros From a Financial Pro
• How Financial Advisers Can Build Retiring Clients' Confidence
• Advisers: Master the Fed Funds Rate, Help Clients Master Retirement

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Estate planning attorneys are familiar with the routine: The client names their spouse as the primary beneficiary and their children as contingent beneficiaries — focusing solely on the fact that they want their accounts to avoid probate.

But what happens if one of those children dies prematurely? In far too many cases, the grandchildren are unintentionally excluded, even when the intent was to provide for them.

The boilerplate forms provided by financial institutions generally do not handle multigenerational planning well and rarely accommodate the special considerations that arise in second marriages, special-needs situations, minor beneficiaries or those with serious drug or alcohol problems.

Kiplinger's Adviser Intel, formerly known as Building Wealth, is a curated network of trusted financial professionals who share expert insights on wealth building and preservation. Contributors, including fiduciary financial planners, wealth managers, CEOs and attorneys, provide actionable advice about retirement planning, estate planning, tax strategies and more. Experts are invited to contribute and do not pay to be included, so you can trust their advice is honest and valuable.

However, naming a trust — not individual children — as the contingent beneficiary of IRAs and 401(k)s can help avoid these issues.

To better understand whether this option is a good fit for you, let's examine the pros and cons of this strategy, the tax and administrative implications and practical guidance for ensuring a trust qualifies as a "designated beneficiary" under IRC Section 401(a)(9).

With the right drafting and foresight, trusts can provide both flexibility and control while avoiding the unintentional disinheritance of grandchildren.

Naming children as primary beneficiaries: The risks

It is common practice to name a spouse as the primary beneficiary of a retirement account and the children as contingent beneficiaries. The rationale is simple: Defer taxes for the longest period and ensure the next generation receives an equal share.

However, this planning often assumes that all children will survive the account holder, and that can be dangerous.

If a child dies before the account owner, many beneficiary forms default to a "per capita" distribution. This means that the deceased child's share is not passed down to their children (i.e., the account owner's grandchildren).

Instead, it is divided equally among the surviving children. This runs contrary to the wishes of most clients, who expect that a predeceased child's share would be passed down to their children "per stirpes."

Here's a clear illustration:

Let's imagine your father has recently passed away, leaving your mother to inherit his $1 million IRA. She names her two children as equal primary beneficiaries, assuming that if one of her children dies, their share will go down to their children.

Tragically, her eldest son passes away before she does. When Mom eventually dies, her IRA is distributed entirely to her surviving child. Her two grandchildren — the children of her deceased son — receive nothing.

What happened? The financial institution's beneficiary form defaulted to a per capita distribution, and it either didn't provide space to name grandchildren as contingent beneficiaries or failed to include a proper per stirpes election.

Mom, like many clients, assumed the form covered these scenarios and didn't scrutinize the instructions. Unfortunately, this oversight caused her to unintentionally disinherit her grandchildren.

Looking for expert tips to grow and preserve your wealth? Sign up for Building Wealth (soon to be called Adviser Intel), our free, twice-weekly newsletter.

Now, the surviving child is left to decide whether to gift a portion to their nieces or nephews. If they do, complex tax issues arise. The surviving child would be responsible for paying the income taxes on the IRA distribution, likely at the highest tax rate possible.

Naming a trust as the beneficiary

Naming a trust as the beneficiary (after the spouse) of a retirement account can address many of the problems described above. When a properly drafted trust is named, the client's wishes are preserved, even if the institution's beneficiary form is limited.

To qualify as a "designated beneficiary" under IRC Section 401(a)(9), the trust must be a valid see-through trust. This means the trust must:

• Be valid under state law
• Be irrevocable or become irrevocable upon death
• Have beneficiaries identifiable in the trust document

A copy of the trust, or a list of beneficiaries, must also be provided to the plan administrator by October 31 of the year following the participant's death.

There are two types of see-through trusts:

• Conduit trusts, where required minimum distributions (RMDs) are passed directly to the individual beneficiary each year, preserving stretch options under SECURE Act exceptions.
• Accumulation trusts, which allow RMDs to be retained in the trust, offering more protection to those beneficiaries that might have special needs or drug problems who cannot have any access to funds. The added protection comes with a cost of accelerating tax liability.

Trusts can be customized to:

• Provide lifetime benefits to a child, with the remainder to grandchildren
• Protect assets from divorce, creditors or lawsuits
• Include special needs provisions without affecting public benefits
• Manage distributions to minors or financially irresponsible heirs

Problems with financial institutions

Despite the clear advantages of naming a trust, practical complications remain. Some custodians resist paying benefits to a trust, citing that "a trust is not a person" and therefore cannot qualify under the beneficiary rules. This is often a misunderstanding of IRS regulations.

Other issues include:

• Delays in processing RMDs or lump sum payouts
• Institutional refusal to recognize the trust as a see-through entity without a court order or legal opinion
• Staff inexperience leading to improper implementation

To mitigate these risks, attorneys should:

• Coordinate with the institution before death
• Submit trust documentation well in advance
• Draft the trust to clearly satisfy the see-through rules
• Provide model language on the beneficiary designation form that matches the trust name and date precisely

Practical drafting and planning tips

Here are some practical tips for implementing a trust-based beneficiary designation:

Always name the spouse first when appropriate. A spousal rollover offers the most favorable tax treatment. Second marriages may alter this recommendation.

Use the full legal name of the trust. This includes the date as the contingent beneficiary. For example, "The Simasko Family Trust dated January 1, 2020."

Avoid generic language like "my living trust" or "the trust I created."

Indicate per stirpes or per capita treatment inside the trust, not on the designation form.

If using a conduit trust, ensure the trust mandates distribution to the beneficiary immediately after receipt from the plan.

If using an accumulation trust, plan for higher income tax exposure and structure the trust to qualify under post-SECURE Act rules or start converting to after-tax accounts, which provide much more flexibility.

Review and update both the trust and beneficiary designations regularly, especially after births, deaths, or divorces.

Risk vs control

While naming individual children as retirement account beneficiaries is simple and tax-efficient, it carries risks that most clients do not fully appreciate.

The premature death of a child, changing family dynamics or a client's desire for long-term asset protection all point toward the benefits of trust planning.

Trusts allow attorneys to create a tailored, multigenerational plan that aligns with a client's real intent. They protect assets, ensure consistent treatment and provide flexibility that forms alone cannot.

However, success depends on precise drafting, careful coordination with custodians and ongoing review.

In the end, a properly structured trust designation is not only a legal tool but a vehicle of control, continuity and peace of mind.

Related Content

• From Wills to Wishes: An Expert Guide to Your Estate Planning Playbook
• The Seven Worst Assets to Leave Your Kids or Grandkids
• Five Trusts You Need to Know About and the Best Time to Use Them
• Are Living Trusts Worth It? Pros and Cons
• ​All About Designating Beneficiaries in Estate Planning

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

What often gets overlooked is the value life insurance can create while you're still living.

Whether helping fund a child's education, start a new business or reinforce retirement plans, life insurance has the potential to do far more, thanks to what are known as living benefits.

If this concept is new to you, you're not alone. A recent study from Prudential Financial revealed that while many Americans consider life insurance essential to their financial strategy, few understand the full scope of its living benefits.

Kiplinger's Adviser Intel, formerly known as Building Wealth, is a curated network of trusted financial professionals who share expert insights on wealth building and preservation. Contributors, including fiduciary financial planners, wealth managers, CEOs and attorneys, provide actionable advice about retirement planning, estate planning, tax strategies and more. Experts are invited to contribute and do not pay to be included, so you can trust their advice is honest and valuable.

Notably, nearly 75% of respondents said they were unfamiliar with how life insurance can be used to build generational wealth.

That gap in understanding presents a timely opportunity, especially during Life Insurance Awareness Month, to change perceptions so that life insurance is viewed as an asset that supports long-term financial goals.

What are living benefits?

Living benefits are features built into certain life insurance policies that allow you to access funds or policy value while you're still alive.

In the right circumstances, they can serve as a flexible resource to help navigate major financial decisions or unexpected challenges.

Let's take a closer look at how they work:

Cash-value accumulation. Permanent policies such as variable universal life insurance can gradually build cash value, which can be borrowed against or withdrawn, often functioning like a low-interest loan without the hassle of going to a bank.

Add-on benefits. Life insurance isn't one-size-fits-all, and that's where riders come in. These optional add-ons let you customize your coverage to fit your lifestyle. Whether it's accessing funds early during illness or pausing payments during hardship, riders give you flexibility when it matters most.

Tax advantages. The cash value grows on a tax-deferred basis. In many cases, if you withdraw only what you've paid in premiums, those funds can be generally accessed tax-free.

Wealth transfer. Life insurance can also be used to pass assets on efficiently from one generation to another. With proper planning, it can help reduce tax burdens for your beneficiaries.

Two paths to living benefits

Understanding the types of life insurance is essential to unlocking living benefits:

Permanent life insurance policies, including variable universal life, provide coverage for your entire life, as long as premiums are paid. Over time, they build cash value that you can use for major expenses such as retirement, medical needs, even business investments.

Think of it like buying a home; it's more expensive at the start, but it builds real value over time.

Term life insurance policies offer coverage for a set number of years, often 10, 20 or 30. They're generally more affordable but don't accumulate cash value.

However, many term policies include features such as accelerated death benefits, which allow you to access a portion of the death benefit if you are diagnosed with a serious illness.

In many ways, term life is more like renting; it's cost-effective and simple, but with no equity unless you use it during the coverage period.

Key considerations with living benefits

If you're considering a life insurance policy that includes living benefits, take the time to align the policy with your financial goals and needs.

Here are a few practical ways to evaluate your options:

Start with your goals. Before comparing policies, think about what you want this insurance to do.

• Are you looking for lifelong coverage or just for a specific stage of life?
• Will the living benefits be used for retirement income or unexpected medical costs?

The clearer you are about your goals, the easier it is to choose the right policy.

Looking for expert tips to grow and preserve your wealth? Sign up for Building Wealth (soon to be called Adviser Intel), our free, twice-weekly newsletter.

Ask about riders. The right rider can make a good policy even more valuable.

For example, Prudential has a rider that allows consumers to access their death benefits early if they're diagnosed with a chronic or terminal illness. It allows individuals to manage real-life challenges with financial confidence.

A long-term care rider can help cover extended care needs later in life.

Understand the costs. Look closely at any fees for accessing the cash value, penalties for early withdrawals and other administrative charges.

A policy that seems affordable upfront might have hidden costs that affect its value over time.

Evaluate flexibility over time. Your financial needs will evolve, and your policy should be able to keep up.

Make sure the policy you choose offers options to adjust premiums, access funds or add coverage as needed.

The role of financial professionals in supporting you

Another recent study by Prudential found that many Americans feel overwhelmed when trying to understand their life insurance policies. Common sentiments include:

• "How do I make sure I don't use up my policy too soon?"
• "What does this mean for the final payout?"
• "Wait, life insurance can help with other expenses?"
• "I get lost in the jargon. One explanation contradicts the next."

A financial adviser can serve as both a guide and educator, helping to demystify these complexities and inform your decisions. Consider asking:

How does the cash value work, and when can it be accessed? Understanding the mechanics and timing of cash value access is critical to long-term planning.

Will using living benefits reduce the death benefit? In some cases, accessing funds now could reduce the amount available to beneficiaries later. In others, it might not.

How does this policy integrate with your broader financial strategy? Life insurance should be an active component of your financial plan, supporting your goals such as preparing for retirement and passing on wealth from one generation to another.

Life insurance is not just about protecting your family after you are gone. When designed and used effectively, life insurance can be an essential part of your financial strategy.

You need to be proactive and make your policy work just as hard for you as you do for your loved ones.

1088254-00001-00

Related Content

• Let's Talk About Life Insurance
• Five Smart Ways to Use Your Life Insurance While You're Still Alive
• Whole Life Insurance: A Multipurpose Financial Planning Tool
• Why Your Life Insurance Should Cover More Than Just Death
• How Life Insurance Can Help You Preserve Your Wealth

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

While the law extends some favorable tax brackets and introduces deductions for older Americans, several provisions do little to support people already in retirement.

Others could quietly raise your costs or trigger unintended tax consequences if you're not careful.

Kiplinger's Adviser Intel, formerly known as Building Wealth, is a curated network of trusted financial professionals who share expert insights on wealth building and preservation. Contributors, including fiduciary financial planners, wealth managers, CEOs and attorneys, provide actionable advice about retirement planning, estate planning, tax strategies and more. Experts are invited to contribute and do not pay to be included, so you can trust their advice is honest and valuable.

If you're retired (or preparing to retire) here's how the new law might affect your finances and what steps to take to protect yourself.

Roth conversions could now do more harm than good

Roth conversions used to be a smart way to control future taxes. With today's lower rates, many retirees converted pretax IRA funds to Roth accounts to lock in those rates and enjoy tax-free growth.

But under the OBBB, this strategy is no longer a slam dunk. Why?

• The new bonus deduction for people 65 and older lowers taxable income, but not adjusted gross income (AGI).
• Roth conversions increase AGI, which determines how much of your Social Security is taxed and whether you'll face IRMAA surcharges on Medicare.
• Some retirees now face a "sneak attack," in which they stay in the same tax bracket, but pay thousands more in Medicare premiums or lose Social Security purchasing power due to added taxation.

What to do: Don't abandon Roth conversions altogether, but be precise. Smaller partial conversions spaced out over several years could help you reduce lifetime taxes without triggering costly ripple effects.

Be sure to run multiyear tax projections that include Social Security taxation and IRMAA thresholds.

It's also a smart idea to calculate your future required minimum distributions (RMDs) at and after age 73.

If those RMDs are projected to push you into the 24% bracket, consider converting enough now to maximize the 22% bracket while you still can.

We don't know what future tax rates will be, but paying taxes now at known rates might be smarter than waiting.

If you're unsure where you stand, get help from an advisor who uses software that models potential long-term tax savings from conversions under current law, which can be a powerful tool for retirement decision-making.

The estate tax exemption rose, but don't let that fool you

The bill raises the federal estate tax exemption to $15 million per person through 2030, but for the majority of retirees, this does nothing to ease the burden of estate clarity, tax efficiency or family coordination.

Unfortunately, many people assume that if they're under the estate tax limit, they don't need to plan. That's a mistake.

Most estate planning issues have nothing to do with taxes and everything to do with:

• Unclear or outdated beneficiary designations
• No instructions for incapacity or health care decisions
• Family disputes about property, debt or inheritance
• Missed charitable or legacy goals

What to do: Revisit your estate plan, regardless of your net worth. A current will, power of attorney, health care directive and coordinated beneficiary structure are essential.

If you're charitably inclined, consider using a qualified charitable distribution (more about this below), or setting up a donor-advised fund (DAF). A DAF allows you to donate a large sum in a high-income year.

For example, if you're converting a large amount to a Roth, you can offset the tax impact while maintaining flexibility in how you give over time.

Medicare cuts might raise your out-of-pocket costs

To fund permanent tax cuts, the OBBB includes more than $490 billion in Medicare reductions in the next decade.

The law doesn't spell out exactly how those cuts will be implemented, but they could result in:

• Higher Part B and D premiums
• Reduced coverage areas for Medicare Advantage plans
• Lower provider reimbursements that make it harder to find care
• More out-of-pocket expenses for medications or specialist visits

What to do: Plan for rising health care costs, even if your income stays flat. Review your supplemental coverage annually, and don't assume your plan from last year will still serve you next year.

Consider building a dedicated health care reserve into your retirement income strategy.

Charitable giving incentives are nice, but not a game-changer

The OBBB includes a new $2,000 charitable deduction for non-itemizers age 65 and older. That's a welcome change, but it might not move the needle much, especially for those who already use qualified charitable distributions (QCDs) from IRAs for tax-efficient giving.

What to do: If you're age 70½ and older and have an IRA, QCDs remain one of the most powerful giving tools available, allowing you to reduce your RMD income and support causes you care about — all without increasing your AGI.

For more flexibility, combine your giving with a donor-advised fund. This can be especially effective if you're doing Roth conversions or realizing gains in a single year and want to offset that added income.

Income stacking could trigger tax surprises

The OBBB keeps lower income tax brackets, but those brackets still interact with other parts of the tax code in ways that can sneak up on retirees. For example:

• RMDs stack on top of other income
• Capital gains could become taxable when layered with dividends, pensions or Social Security
• You could unintentionally cross into a higher effective tax rate even if your marginal bracket doesn't change

What to do: Be intentional about withdrawal sequencing. In some years, it might make sense to draw from Roth accounts to stay under Medicare or tax thresholds. In others, you could realize capital gains up to the 0% tax rate.

Looking for expert tips to grow and preserve your wealth? Sign up for Building Wealth (soon to be called Adviser Intel), our free, twice-weekly newsletter.

Consider using tax-efficient investments in your non-qualified (taxable) accounts.

By focusing on low-turnover funds, municipal bonds or actively managed portfolios with tax-loss harvesting strategies, you might reduce your annual tax liability while keeping more of your investment income.

The bottom line

The OBBB might have promised sweeping relief, but for retirees, it offers more caution than comfort.

The next few years will require sharper planning, not just to avoid tax surprises, but to build in flexibility for rising health care costs, shifting income needs and legacy goals.

The good news? You still have time to make smart moves that can protect your future. Work with a financial professional who understands how today's rules impact retirement and how to adjust as things evolve.

At Dorhout Retirement Services, we help people retire with clarity and confidence, even when the rules change. If you're unsure how this new legislation affects your income, taxes or estate, we're here to help.

Grant Dorhout offers investment advisory services through CWM, LLC, an SEC Registered Investment Adviser. This article is not intended to provide specific legal, tax, or other professional advice.

For a comprehensive review of your personal situation, always consult with a tax or legal adviser.

Converting from a traditional IRA to a Roth IRA is a taxable event.

Generally, a donor-advised fund is a separately identified fund or account that is maintained and operated by a section 501(c)(3) organization, which is called a sponsoring organization. Each account is composed of contributions made by individual donors. Once the donor makes the contribution, the organization has legal control over it. However, the donor, or the donor's representative, retains advisory privileges with respect to the distribution of funds and the investment of assets in the account. Donors take a tax deduction for all contributions at the time they are made, even though the money may not be dispersed to a charity until much later.

Related Content

• What the OBBB Means for Social Security Taxes and Your Retirement: A Wealth Adviser's Guide
• Seven Medicare Changes Coming in 2026
• Top Four Retirement Withdrawal Strategies to Maximize Your Savings
• Five Under-the-Radar Shifts Investors and Job Seekers Can't Afford to Ignore Under the OBBB
• How to Maximize Your Social Security Now That the One Big Beautiful Bill Is Law

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

While no one can precisely predict when, it's useful to consider how a lower rate environment could influence financial decisions related to housing, estate planning, taxes, investing and retirement.

Housing

Housing is often the most noticeable area affected by falling rates. A rate drop isn't a magic solution for your housing plans, but it is an opportunity to reset and gain flexibility.

Kiplinger's Adviser Intel, formerly known as Building Wealth, is a curated network of trusted financial professionals who share expert insights on wealth building and preservation. Contributors, including fiduciary financial planners, wealth managers, CEOs and attorneys, provide actionable advice about retirement planning, estate planning, tax strategies and more. Experts are invited to contribute and do not pay to be included, so you can trust their advice is honest and valuable.

If mortgage rates decrease, mobility may increase, giving more families the freedom to buy, sell or relocate.

However, it's important to keep in mind the broader financial implications of moving, such as property and casualty insurance costs and availability.

Adjustable-rate mortgages (ARMs) taken out in 2021 or 2022 are nearing reset, and although refinance rates may not be as low as they were then, they still appear more favorable than current levels.

For some households, tapping into home equity via a HELOC might also be a smart option if borrowing costs decline.

What you can do: Review your mortgage and debt. If you have an ARM or other variable-rate debt, think about refinancing to a fixed rate while rates are still historically favorable.

A lower rate could also make it a good time to consider using home equity through a HELOC for planned expenses or debt consolidation.

Estate planning

Estate planning becomes more relevant in a lower-rate environment. Strategies like grantor retained annuity trusts (GRATs) and intrafamily loans become more effective when the IRS' Section 7520 rate drops.

It's easier to shift appreciation out of an estate when the so-called "hurdle rate" is lower, which can help preserve wealth for future generations.

What you can do: Reassess your estate plan. If you're a high-net-worth individual, consult with your estate planning attorney about strategies like a GRAT.

These become more effective when the IRS 7520 rate (a benchmark for trust asset valuation) is lower, enabling you to transfer more wealth to heirs tax-free.

Tax planning

Falling interest rates can suggest slowing inflation. Since federal tax brackets and the standard deduction are indexed to inflation, slower growth may lead to smaller upward adjustments. This could place more income into higher tax brackets.

Simultaneously, lower borrowing costs often boost asset values, increasing capital gains exposure — a beneficial challenge if managed carefully.

Lower rates may also encourage more charitable giving. Certain planned giving strategies become more advantageous if rates are lower.

For example, a charitable lead trust (CLT) might become more attractive than a charitable remainder trust.

It's worth noting that starting next year, a provision in the One Big Beautiful Bill (OBBB) will reduce the deduction for households in the highest tax bracket from 37% to 35%, so timing is critical.

What you can do: Analyze your tax strategy. A lower-rate environment may boost asset values, increasing exposure to capital gains taxes — a positive problem to have. Consider strategies like tax-loss harvesting to offset gains.

For charitable giving, a CLT might be more appealing, as lower rates reduce the gift tax value of the remainder interest.

Investing

In a lower-rate environment, diversification isn't just a strategy — it's your best defense.

Investments tend to respond strongly to changes in interest rates. Historically, large-cap stocks perform well when rates decline.

Companies benefit from cheaper borrowing, and investors often shift from bonds to stocks when yields fall.

Looking for expert tips to grow and preserve your wealth? Sign up for Building Wealth (soon to be called Adviser Intel), our free, twice-weekly newsletter.

Nonetheless, diversification remains essential. While yields on new bonds may reset lower, the value of existing fixed income holdings typically rises.

Managing reinvestment risk alongside opportunities makes portfolio management more important than ever.

What you can do: Examine your asset allocation. While declining rates may favor equities, they also reduce yields on new bonds.

Ensure your portfolio balances growth-oriented assets (like stocks) with stable, income-producing assets (like bonds) to reduce longevity risk and support your long-term goals.

Retirement planning

Retirement planning also needs attention in a declining rate environment. Lower yields can make conservative portfolios more vulnerable, underscoring the importance of including growth assets that support long-term objectives.

A proper mix of fixed income stability and equity growth helps mitigate longevity risk in a world where bonds alone may no longer suffice.

What you can do: Update your retirement projections. Lower bond yields can impact the income from your retirement portfolio.

Run new projections using a more conservative income assumption from fixed-income assets to keep your spending plan sustainable.

Adjust your savings rate or portfolio mix as needed.

Putting it all together

The potential of falling interest rates isn't a signal to overhaul your entire financial plan, but rather an opportunity to review and refine it. A proactive approach is vital.

By understanding how these changes could impact your housing, estate, tax and investment strategies, you can position your finances to benefit from the new environment.

The shift toward lower rates highlights the timeless importance of a well-diversified portfolio and a long-term perspective. While short-term market reactions may grab headlines, the true measure of a sound financial plan lies in its resilience and adaptability.

I often remind clients that the goal isn't to predict the future but to prepare for it, whatever it may bring.

Related Content

• I'm an Investment Strategist: This Is How the Fed's Next Rate Move Could Impact Your Wallet
• The Smartest Places to Keep Your Cash If Rates Drop in 2025
• How the Federal Reserve Affects Mortgage Rates — and What It Means for Homebuyers in 2025
• You Don't Want It, But You Should Plan for It Anyway: An Expert Guide to Long-Term Care
• Will My Children Inherit Too Much?

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

For most, the dream ends with visions of mansions, luxury cars or world travel. For the lucky few who win, their lives will be forever changed.

So, imagine it really does happen to you; you win the jackpot. First things first: relax. I know the adrenaline is still rushing, but the first thing to do is to pause and breathe.

Then, before you do anything else, seek the right legal counsel. You need a financial adviser who specializes in working with lottery winners, a trusted professional who understands how to navigate the state's gaming department and set up trusts that can protect your identity wherever possible.

Kiplinger's Adviser Intel, formerly known as Building Wealth, is a curated network of trusted financial professionals who share expert insights on wealth building and preservation. Contributors, including fiduciary financial planners, wealth managers, CEOs and attorneys, provide actionable advice about retirement planning, estate planning, tax strategies and more. Experts are invited to contribute and do not pay to be included, so you can trust their advice is honest and valuable.

Protecting your identity and your winnings

For years, my team and I have worked with lottery winners. I've seen the difference it makes to get the right team in place early. Making sound investment decisions can mean the difference between long-term stability or losing it all. Nearly 70% of lottery winners exhaust their winnings within a few years.

You can avoid the spotlight through carefully designed trusts and other legal instruments.

Taxes are another major consideration, with federal income tax brackets starting at 24% and climbing, depending on your income. Hence, it's critical to work with a trusted financial adviser who understands these specific issues.

Building a family office

I suggest that lotto winners establish what is essentially a family office — a structure that supports their financial lives from day one.

A financial adviser can guide decisions on how assets should be owned, whether in trusts, LLCs or other entities. Much of this work overlaps with estate planning, because sudden wealth makes questions about long-term protection unavoidable.

But for many of my clients, the conversation quickly turns to something even more lasting: philanthropy.

After the houses, the cars, the trips and the gifts to relatives, the truth settles in — you have more wealth than you'll ever reasonably spend. At that point, the real opportunity presents itself: how to give back in ways that reflect your values and build your legacy.

Author Shannon Alder put it well: "Carve your name on hearts, not tombstones. A legacy is etched into the minds of others and the stories they share about you."

Philanthropy as a mission, not a hobby

Philanthropy is not simply about writing checks. It's about aligning resources with your mission to do good. And while anyone can be a philanthropist, substantial resources allow you to scale that mission into something enduring.

The question for you as a lottery winner is how to transform your charitable intentions into a structured, lasting plan.

Looking for expert tips to grow and preserve your wealth? Sign up for Building Wealth (soon to be called Adviser Intel), our free, twice-weekly newsletter.

Donor-advised funds (DAFs) and private foundations are among the most powerful vehicles to do this. DAFs have surged in popularity in recent years, with contributions reaching $85 billion in 2022.

These vehicles allow you to receive an immediate tax deduction, invest the assets for growth and distribute grants over time to the charities that align with your values.

But before you select a giving vehicle, you need clarity about your mission:

• What do you want your wealth to stand for?
• How do you want your children or grandchildren to understand the role of this gift in their lives?

I often guide clients through a thought experiment: Imagine you've already provided financial security for your heirs, and they have what they need to live comfortably.

At that point, the question becomes not how much more to give them, but how to pass down your values — helping to ensure your legacy reflects more than wealth alone.

That, ultimately, is what philanthropy allows you to do.

From wealth to legacy

Of course, it is not always straightforward. Once people know you have won big, you will be approached from every angle — acquaintances with new-business ideas, organizations seeking donations and even bad actors.

This is where having a trusted adviser becomes essential. A qualified financial adviser can help you filter opportunities, weigh risks and align your giving with your financial goals.

In my practice, I encourage clients to think of giving as a parallel track to wealth management — not a separate afterthought, but a central element of their financial identity.

Winning the lottery is an extraordinary stroke of fortune. But true wealth is not measured only by what you keep. It is measured by the lives you touch, the communities you strengthen and the values you carry forward.

That is the kind of legacy money cannot buy — but philanthropy can.

ALINE Wealth is a group of investment professionals registered with Hightower Securities, LLC, member FINRA and SIPC, and with Hightower Advisors, LLC, a registered investment advisor with the SEC. Securities are offered through Hightower Securities, LLC; advisory services are offered through Hightower Advisors, LLC.

Related Content

• States That Won't Tax Your Powerball Winnings in 2025
• Powerball Jackpot Winner Will Get a Hefty Tax Bill
• States With the Highest Powerball Taxes
• Mega Millions After Taxes: How Much The Winner Gets
• Did You Get a Cash Windfall? The Case for Doing Nothing

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

This year is a bit unusual. We have record-high stock market values, so many new retirees see strong promise for their investment portfolios to generate income throughout their retirement years.

However, many people are concerned those high values won't last.

Kiplinger's Adviser Intel, formerly known as Building Wealth, is a curated network of trusted financial professionals who share expert insights on wealth building and preservation. Contributors, including fiduciary financial planners, wealth managers, CEOs and attorneys, provide actionable advice about retirement planning, estate planning, tax strategies and more. Experts are invited to contribute and do not pay to be included, so you can trust their advice is honest and valuable.

So, people are a bit more wary right now than usual. They have questions … which they sometimes don't ask because they are nervous.

Asked and answered

Here are several, along with the perspectives I've offered in 2025.

Is it really a good time to retire with all this market volatility and economic uncertainty? Should I just push through and hope it all works out?

Market volatility is common. However, when you retire, volatility can become more emotionally challenging — especially since you're no longer adding to your 401(k) with each paycheck.

We typically see stock market corrections, or short-term declines of about 10%, every year or two — and bear markets, meaning declines of 20%, every 3½ years, on average.

When a pullback happens, it's a great time to gauge your true risk tolerance, and sometimes there are adjustments to be made to your financial plan.

Remember that the market affects only part of your financial story. Many people have other steady sources of income, such as pensions. In this case, retirement income is much less affected by market swings.

What if stocks tumble just after I retire?

In the financial planning process, an adviser typically will show various scenarios for how your portfolio value may change over time. This process is key to determining both investment allocation and withdrawals.

Your adviser can therefore show you that, yes, it's true that a down market shortly after retiring can have a materially negative impact on your financial plan.

Therefore, prior to retirement, we like to model a bear market scenario in the first year of retirement and see how that affects someone's specific situation.

That information does sometimes suggest to people that they may want to consider working one more year.

More often, though, it provides reassurance that everything is likely to be just fine — and the focus should be more about your readiness and what you want from your time than about catching the exact right day.

Should I tweak down my withdrawals if the market's really flat or down?

I don't recommend that retirees change their spending plans if the market is flat for a year. Many people like to think about retirement income in terms of a withdrawal rate.

In my experience, people who withdraw less than or equal to 4% of an investment portfolio each year tend to see their nest egg increase throughout retirement.

That doesn't mean there's a magical "4% rule" that guarantees success, but it's a good way to gain perspective in flat or down markets.

What if my partner or I suffer a major health setback early in retirement?

Nothing is a bigger priority than health. Make sure that is your main focus — more than money. But sometimes in the financial planning process, you have to be realistic about longevity estimations if health problems are severe.

Looking for expert tips to grow and preserve your wealth? Sign up for Building Wealth (soon to be called Adviser Intel), our free, twice-weekly newsletter.

In that case, we typically still model with an assumption that at least one spouse will live to age 90 or 95. In the event one spouse passes sooner, household spending tends to be lower thereafter.

What happens if my spouse and I end up with "too much togetherness" time?

This is a common concern — and simply knowing it's common usually helps.

Retirement is a gift of time. That time needs managing in new ways.

What I find common is each spouse in retirement takes their hobbies to a new level to, say, "get away" from each other. The husband golfs three to four times a week or joins an additional league. The wife expands the garden and creates her own arts and crafts room in the extra bedroom.

You find out quickly what a retired client likes to do from the other spouse's comments: "He spends all his time on the car, I tell ya!" This is especially true when I ask what they spend their money on or what they would like to spend more money on.

The longer travel trips might also have something to do with this concern, too. You are used to spending five to seven days in a hotel in Arizona, which now turns into a month in an Airbnb … or a three-week cruise around Alaska.

What if my kids or extended family start asking for more financial or caregiving support, now that I'm retired and "have time"?

Time is certainly a precious gift that grandparents can give to parents. Taking care of a toddler for one day a week can have major financial impacts with daycare costs being north of $1,200 to 1,500 per month.

Perhaps there's a mutual blessing — or perhaps not. But this is one area where thinking "family" as much as "dollars" may be a blessing for everyone over time.

Should I feel guilty about spending now on things like travel and fun, instead of leaving more for my kids?

I would not feel guilty — and your kids probably wouldn't want you to either. They have seen how hard you both worked to raise the family and get to a place of retirement.

That said, this can sometimes be polarizing. I have seen folks want to pass away with only one dollar to their name, and they are very transparent with the family about it.

I have also seen folks still penny pinch because of old habits, even when they don't need to.

What's most important is doing a good job of educating kids on the wealth that may or will come to them.

You may find, too, that it's much more rewarding to give meaningful gifts during your own lifetime, whether via a 529 plan for education, a down payment on a house or other practical needs.

A $30,000 gift now could have a $200,000 impact later by allowing your children to keep more money invested longer term.

How much cash do I really need to keep?

I recommend holding cash assets that — when combined with funds you know will flow in from other certain sources of income, like Social Security or pensions — represent two full years of spending.

For example, say a couple's plan is for spending $80,000 annually. Without taking into account other sources of income, two years of spending would be $160,000.

However, this couple draws $30,000 of Social Security and $20,000 of pension income annually. Over two years, those sources of income will generate $100,000. That implies the couple should have $60,000 in cash or cash-equivalent investments.

Closing thought

Thorough planning around your concerns is one of the best ways to ensure you can sleep at night.

Ask questions and share concerns. It's our responsibility as advisers to make sure these are addressed so if there are bumps in the road, you are prepared and confident.

This information is for educational and illustrative purposes only and should not be used or construed as financial advice, an offer to sell, a solicitation, an offer to buy or a recommendation for any security. Opinions expressed herein are as of the date of this report and do not necessarily represent the views of Johnson Financial Group and/or its affiliates. Johnson Financial Group and/or its affiliates may issue reports or have opinions that are inconsistent with this report. Johnson Financial Group and/or its affiliates do not warrant the accuracy or completeness of information contained herein. Such information is subject to change without notice and is not intended to influence your investment decisions. Johnson Financial Group and/or its affiliates do not provide legal or tax advice to clients. You should review your particular circumstances with your independent legal and tax advisors. Whether any planned tax result is realized by you depends on the specific facts of your own situation at the time your taxes are prepared. Past performance is no guarantee of future results. All performance data, while deemed obtained from reliable sources, are not guaranteed for accuracy. Not for use as a primary basis of investment decisions. Not to be construed to meet the needs of any particular investor. Asset allocation and diversification do not assure or guarantee better performance and cannot eliminate the risk of investment losses. Certain investments, like real estate, equity investments and fixed income securities, carry a certain degree of risk and may not be suitable for all investors. An investor could lose all or a substantial amount of his or her investment.

Related Content

• Crazy Markets Shouldn't Derail Your Retirement if You Follow This Financial Pro's Plan
• How to Retire Early in Six Steps
• Early Retirement Withdrawal Strategies for the Long Haul
• How to Give an Inheritance While You're Alive
• A Financial Planner's Guide to Unlocking the Power of a 529 Plan

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

But most families aren't ready, and the cultural divide between generations may make it more complicated than ever to preserve that legacy.

Until recently, Baby Boomers enjoyed unprecedented generational dominance, not only as the wealthiest generation but also the largest generation by population.

Kiplinger's Adviser Intel, formerly known as Building Wealth, is a curated network of trusted financial professionals who share expert insights on wealth building and preservation. Contributors, including fiduciary financial planners, wealth managers, CEOs and attorneys, provide actionable advice about retirement planning, estate planning, tax strategies and more. Experts are invited to contribute and do not pay to be included, so you can trust their advice is honest and valuable.

While Millennials have since come to outnumber the Boomers, the postwar generation still represents the wealthiest generation in U.S. history, holding more than 50% of the nation's household wealth.

As Baby Boomers continue to exit the workforce, the wealth they've built — fueled by decades of substantial salaries and asset growth — is beginning to move to their children and grandchildren, with ripple effects across family dynamics, the economy and the wealth management industry.

Odds are stacked against families

From business succession plans to charitable giving, the impact of this "silver tsunami" will create economic waves that will reverberate for years. Boomers want their success to become a legacy. But turning wealth into lasting prosperity is easier said than done.

Studies have shown that 70% of families will lose inherited wealth by the second generation, and more than 90% of families will have lost their wealth by the third generation, a conundrum known as the "third-generation curse." The odds are stacked against them.

If Boomers want to beat the odds to become a part of the elite 30% — so that not only their children, but their children's children may benefit from a lifetime of accrued wealth — they need to understand that it's more than meticulous planning that will get them there. Building multigenerational wealth requires multigenerational engagement.

And that starts by understanding multigenerational differences.

Lasting wealth starts with early preparation

While across the generational divide finances are a top concern for Americans, how each generation approaches money is shaped by their collective experiences.

Gen X (born from 1965 to 1980) and Millennials (born from 1981 to 1996) have been shaped by the economic trauma of coming of age during the 2008 financial crash.

Gen Z and the upcoming Gen Alpha (those born from 2013-2024), meanwhile, appear to be increasingly skeptical about financial planning, given their experiences shaped by COVID-19 and natural disasters.

It's not easy to get a hypercautious Millennial on the same page as a "why save?" Gen Zer, neither of whom may have the same sort of economic values or plans as their Baby Boomer relative.

Looking for expert tips to grow and preserve your wealth? Sign up for Building Wealth (soon to be called Adviser Intel), our free, twice-weekly newsletter.

But building lasting wealth depends on it.

While wealth planning is a deeply personal decision for families — one in which individual family values and norms can weigh just as much, if not more, than fundamental economic factors — there is growing awareness that lasting wealth requires preparing family members early.

Basics, such as teaching financial literacy, can be introduced early in children's lives, while more specific wealth planning information can be shared as they grow into young adults.

A three-part plan is your path to success

However, truly bridging the generational gap requires bringing younger generations along in the wealth planning process and mindset, a shift in the traditional wealth planning process that wealth managers have been more than happy to accommodate.

Both wealthy individuals and their wealth managers have become increasingly invested in creating a comprehensive wealth management plan. A plan that covers all three bases:

• A financial plan for their entire life
• A break-the-glass plan for life's emergencies
• And a legacy plan for future generations

From an individual's perspective, it's a way to build peace of mind, ensuring that their family members have all the necessary information and access in the event of an emergency.

Seventy percent of individuals who inherit wealth switch wealth advisers after the inheritance — a significant drop-off for managers overseeing and managing these assets.

While some of this drop-off comes from younger generations wanting to "do it their way," a bigger factor is that many wealth firms have failed to build relationships with these future clients.

Historically, the industry hasn't been set up to serve younger generations — and too often, their needs have not been prioritized.

This generational drop-off is a significant factor in why the industry is now evolving to focus on the sort of holistic, personalized services that younger generations are seeking.

More firms are pushing to become certified fiduciaries, changing the decades-old wealth management practice of product-based sales.

While the generations may have different approaches to money and wealth more broadly, it's becoming increasingly apparent that more want a holistic approach to their wealth; 52% of high-net-worth individuals are now looking for holistic services — a stark increase from 29% in just 2018.

It's all good news for families, who can use this newfound focus on this part of the wealth management industry to their advantage, connecting their children and grandchildren with wealth managers early on to help bridge the gap between generations.

Summing it all up

Here are nine steps you can take to get ready for your wealth transfer:

• Start early and define your family's goals and values
• Communicate openly with family members about your plans
• Take inventory of assets and organize essential documents
• Create a solid estate plan with wills, trusts and powers of attorney
• Minimize taxes through strategic gifting and trusts
• Choose the right people and advisers to carry out your plan (executors, trustees)
• Educate and prepare your heirs
• Plan for special assets or circumstances (like a family business or international issues)
• Review and update your plan regularly

Helping young people to see the value of wealth management, with a personalized, tangible plan, benefits not only future generations but their wealth manager as well, who is incentivized to help a Gen Zer understand the value of saving for a car or a house, or create a low-risk investment portfolio for a market-cautious Millennial.

This massive wealth transfer is occurring as the wealth management industry begins to recognize its business potential. Families should lean into that shift — because the industry already is.

Related Content

• I'm a Financial Adviser: What I Would Tell My 18-Year-Old Self About Money
• 4 Reasons Families Fail When Transferring Wealth
• You Don't Want Just a Financial Plan: You Need a Purpose and Retirement Ideals
• Wealth Transfer Is About More Than Just Money
• 8 Rules for Choosing the Right Financial Adviser

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

This credential is more than a title — it's a calling.

The CKA, offered by Kingdom Advisors, is a nationally recognized certification for financial professionals committed to integrating biblical principles with sound financial advice.

For Christians, it signals their adviser doesn't just share their worldview but is also trained to apply it thoughtfully to their financial decisions.

Kiplinger's Adviser Intel, formerly known as Building Wealth, is a curated network of trusted financial professionals who share expert insights on wealth building and preservation. Contributors, including fiduciary financial planners, wealth managers, CEOs and attorneys, provide actionable advice about retirement planning, estate planning, tax strategies and more. Experts are invited to contribute and do not pay to be included, so you can trust their advice is honest and valuable.

What does it take to become a CKA?

Becoming a CKA requires rigorous qualifications across four key areas:

1. Education and training. Candidates must complete a college-level curriculum covering such topics as the theology of money, stewardship and generosity.

They'll also learn about biblical perspectives on core planning areas: retirement, taxes, investments, risk management and estate planning. This training emphasizes a biblical worldview on wealth, contentment and legacy.

2. Industry experience. To ensure technical competence, CKA candidates must hold a respected financial credential, such as the CFP®, CPA, ChFC® or JD.

If they don't hold one of these credentials, they must have at least 10 years of financial planning experience.

3. Personal character and faith alignment. CKA candidates must provide a pastoral reference, two client testimonials and an affirmation of Kingdom Advisors' Statement of Faith and Code of Ethics.

The designation is rooted in the values of integrity, servant leadership and Christ-centered counsel.

4. Examination and ongoing accountability. After passing a comprehensive proctored exam, advisers must complete continuing education and uphold ethical standards each year to maintain their credential.

Why we encourage the CKA

At Peak Retirement Planning, we believe money is a tool to glorify God. Psalm 24:1 reminds us, "The earth is the Lord's and the fullness thereof."

Money is a good gift given by God that can be leveraged for much good. But it can't provide lasting happiness as an end in itself. That eternal perspective guides how we counsel our clients.

The training is not just theoretical; it equips us to serve clients with biblical wisdom on giving, legacy planning and contentment — issues that are central to the lives of many Christian families.

Looking for expert tips to grow and preserve your wealth? Sign up for Adviser Intel (formerly known as Building Wealth), our free, twice-weekly newsletter.

The CKA community and study groups also help us stay rooted in these values as we grow professionally and spiritually.

We don't view the CKA as a badge. It's a blueprint for doing our work with excellence, integrity and purpose.

Why clients value the CKA

Clients often come to us seeking more than spreadsheets and projections. They want to work with someone who:

• Shares their faith-based view of wealth and stewardship
• Understands generosity and contentment are as important as growth
• Can offer biblically grounded counsel on legacy and giving

Many Christian investors feel a great call to honor God with the wealth and resources that He has blessed them with, and they want to work with a team that understands the goal is not merely to grow the account value as large as possible.

These investors understand tomorrow is not guaranteed, and their earthly possessions won't follow them into eternity. Rather than just build "bigger barns," they want to use their time, talents and treasures to glorify their Creator.

The CKA designation gives families the confidence their adviser is held to a high standard, both ethically and spiritually. They can also know their adviser is equipped to guide them in ways that honor their values.

Our clients enjoy working with a team that steps back to consider such questions as, "Where are we going?" and "Why are we going there?" in addition to implementing strategies that answer the "what" and "how" questions.

For clients who want to align their financial lives with their faith, the Certified Kingdom Advisor credential offers exactly that: clarity, confidence and counsel from a biblical perspective.

The appearances in Kiplinger were obtained through a PR program. The columnist received assistance from a public relations firm in preparing this piece for submission to Kiplinger.com. Kiplinger was not compensated in any way.

Related Content

• Three Charitable Giving Strategies for High-Net-Worth Individuals
• Integrity, Generosity and Wealth: A Faith-Based Approach to Business
• Five Opportunities if You're in the 2% Club in Retirement
• Have $1M+ Saved? Consider a Financial Planning One-Stop Shop
• Want to Hire a Financial Planning Firm? Five Questions to Ask

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Issues that undermine a business's financial health often go undiagnosed until owners consider their exit. The 2023 National State of Owner Readiness Report by the Exit Planning Institute reveals some critical areas where business owners tend to be unprepared, and the consequences could be dire.

The Kiplinger Building Wealth program handpicks financial advisers and business owners from around the world to share retirement, estate planning and tax strategies to preserve and grow your wealth. These experts, who never pay for inclusion on the site, include professional wealth managers, fiduciary financial planners, CPAs and lawyers. Most of them have certifications including CFP®, ChFC®, IAR, AIF®, CDFA® and more, and their stellar records can be checked through the SEC or FINRA.

Here are five key issues and steps to take to avoid the scary stuff before it's too late.

Business exit planning problems in a nutshell

1. Putting off estate planning

Just 30% of owners have a written estate plan, and only 24% have a current will.

Estate planning isn't sexy, but it can help support succession plans, preserve business and personal assets and spare your family from a nasty tax bill.

Without a proper estate plan, your business and personal assets are at risk, potentially leaving employees and family unprepared for the future.

Take action: Begin as soon as possible by consulting with estate planning professionals to create a comprehensive plan, including wills and trusts. Establish or update your estate plan to reflect changes in your business, personal life and tax laws.

Communicate your plan with family and key stakeholders to ensure everyone is aware of your intentions and prepared for the transition.

2. Delaying personal financial planning

Many business owners are hyper-focused on revenue and the daily challenges of running their business. But even a thriving business may not support long-term goals if your personal, business and family finances are out of sync.

About 42% of business owners lack a written personal financial plan prepared by a professional financial adviser. This is why we talk about putting personal, family and business financial planning on "parallel paths." All are essential to achieve a successful transition and post-exit goals.

Take action: To ensure your financial future aligns with your business exit strategy, partner with a CERTIFIED FINANCIAL PLANNER® (CFP®) — ideally one with Certified Exit Planning Advisor (CEPA®) credentials — to build a comprehensive, personalized plan.

Clearly define your financial goals, from retirement and investments to lifestyle needs, and commit to regularly reviewing and adjusting your plan to stay on track amid changing market conditions.

3. Exiting without a plan

Just 42% of owners have a formal, written transition plan for their company. This is critical given that 49% of business owners want to exit within the next five years.

Without a formal exit plan, you may face significant challenges in achieving a smooth and successful transition.

Take action: To exit your business smoothly and successfully, work with your adviser to create a clear, detailed plan that outlines your goals, timeline and transition strategies.

Once your plan is in place, communicate it with key stakeholders and begin executing the necessary steps to achieve your desired outcome. Schedule regular reviews to keep your plan on track.

4. Dependence on business income

Research shows 70% of business owners need the income from their business to support their chosen lifestyle. This stat highlights your "wealth gap."

If you need $3 million to support your long-term post-exit lifestyle and you have $500,000 in personal assets and sell your business for $2 million, your wealth gap is $500,000. So, part of your exit plan will be how to close that wealth gap, starting now.

Many owners of small and midsized businesses rely heavily on their business as their primary — sometimes only — source of income.

Take action: To secure your financial future, focus on diversifying income streams now to reduce future reliance on business earnings. Continue building business value to maximize your net proceeds when it's time to exit.

At the same time, develop a financial plan that supports your long-term independence and lifestyle goals, ensuring you're not solely dependent on proceeds from your business sale or transition.

5. The 5 D's

In presentations to business owners, this portion of our program typically takes the oxygen out of the room. About 50% of business exits are involuntary, meaning owners don't proactively decide to exit.

Looking for expert tips to grow and preserve your wealth? Sign up for Building Wealth, our free, twice-weekly newsletter.

Instead, they are compelled to exit by one or more of the "5 D's": death, disability, divorce, distress or disagreement (with business partners).

Many owners don't like to consider that they won't be able to choose how and when they will exit the business. These discussions can be deeply uncomfortable, but it's far better to face the discomfort now than be unprepared for the 5 D's when they occur.

Take action: "Be prepared" is sound advice for business owners as well as Boy Scouts. To protect your business and family legacy from unforeseen events, build robust contingency plans that cover involuntary exit scenarios, such as illness, divorce or financial distress, through tools including insurance, buy-sell agreements and emergency funds.

Regularly review plans to keep them relevant and ensure they are clearly communicated.

Plan to exit fearlessly

The statistics are indeed scary, but they need not spell doom for your business. Instead, let them serve as a powerful motivator.

Now is the time to start understanding your business valuation, the steps to build business value and how you will fund your post-ownership phase.

To move forward with confidence, start with a business valuation and a personal financial audit. Then, build your exit strategy with a CEPA-certified adviser.

Content in this article is for general information only and not intended to provide specific advice or recommendations for any individual. 2025-8650

Related Content

• The Most Important Number for a Business Owner Considering a Sale
• From Entrepreneur to Retiree: Boosting Your Business' Value
• The Four D's That Could Force You to Sell Your Business
• Things that Surprise Business Owners When It's Time to Sell
• Seven Essentials When Preparing to Sell Your Business

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Question: What is StoryCorps?
AJ: StoryCorps is a nonprofit oral-history organization dedicated to recording the stories of everyday people across the U.S. We record conversations between two people and archive them with the Library of Congress in what’s now the largest collection of human voices ever gathered — more than 700,000.

Question: What is your role as a national facilitator?
AJ: I bring people together for these conversations and guide them through the recording process. I travel wherever I’m needed with a recording kit, and I also help run our booth in downtown Manhattan, which is a studio space open to the public. Some facilitators are on the mobile tour, traveling around the country in an Airstream trailer equipped with a studio.

Most conversations are between people who already know each other, but sometimes people come in on their own, and I or another facilitator interview them. Participants typically come up with their own questions to ask each other, so the stories can go anywhere and are very wide-ranging. Some people want to share childhood memories or their experiences in the military. And some want to ask their loved ones big questions that they normally don’t get the opportunity to ask.

Question: How did you get involved?
AJ: I became interested in oral history during the pandemic, while studying neuro­science in college. When classes went virtual, my best friend and I decided to take a semester off from school and ended up borrowing my mom’s car to road-trip around the country and record stories from young people. We drove from our hometown in Maryland all the way to Utah and back, recording more than 80 oral histories across 16 states. It was an incredible experience, and you can read or listen to some of the stories at www.generationpandemicproject.com. During the following school year, I decided to dive deeper into interviewing, creative writing and oral history, and I joined StoryCorps a little over a year ago.

How can people share a story with StoryCorps?
AJ: The easiest way is to download the StoryCorps app, which allows you to record your story with a conversation partner. It will automatically upload to the StoryCorps Archive and it’ll be archived in the Library of Congress, too. You can also visit StoryCorps to see whether we’re coming to your city and book an appointment to record either in-person or virtually.

In your experience, what makes a great story?
AJ: I’ve learned that there’s an important dif­ference between a good story and a good recording experience. A good story usually has a typical narrative arc, a lot of details, tension, a surprise, and something fascinating and unique. But a good recording just needs authenticity — for you to be yourself and express your feelings openly. That may involve showing gratitude, giving compliments and maybe sharing something the other person has never heard. It doesn’t have to be extraordinary. But moments where you reveal something new often make for a great recording experience.

Where can people go to listen to StoryCorps recordings?
AJ: You can find them at StoryCorps, and you can also listen to the StoryCorps podcast, which is available wherever you go to access podcasts. NPR’s Morning Edition has a weekly segment with our stories, and sometimes they’re on Weekend Edition, too. On our YouTube page we have a collection of videos that pair story recordings with animation.

Note: This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.

Related

• How to Tell Your Own Story
• Leave Your Life Story as a Legacy for Your Heirs
• To Buck the Third-Generation Curse, Focus on the Family Story

Pretty much every modern president would prefer to serve in a low-rate environment, but none has been as vocal about that desire as President Donald Trump.

Weaker economic data that has recently come to light via a revision and a messenger shot (metaphorically, of course), mean that the president might get his wish in September.

Kiplinger's Adviser Intel, formerly known as Building Wealth, is a curated network of trusted financial professionals who share expert insights on wealth building and preservation. Contributors, including fiduciary financial planners, wealth managers, CEOs and attorneys, provide actionable advice about retirement planning, estate planning, tax strategies and more. Experts are invited to contribute and do not pay to be included, so you can trust their advice is honest and valuable.

Our retired clients have largely benefited from higher rates, as they have mortgages that were either refinanced around 3% or paid off. They typically don't carry consumer debt and often have the ability to pay for a car in cash when it makes sense.

On the flip side, these retirees have benefited from rates hovering between 4% and 5% on cash-equivalent investments, bonds are actually paying a coupon, and if they want guaranteed income, annuities have come back into favor.

If the Fed announces any significant cuts, mortgage rates are likely to come down. Millennials and Gen Z will breathe a sigh of relief, but Boomers will wish they'd taken advantage of what was available.

Here are three ways to avoid that regret.

1. Lock in cash rates beyond one year of expenses

The money market instruments we use with clients have yields that typically adjust every seven days. When/if the Fed cuts rates, these are one of the first instruments to come down with the federal funds rate.*

If you're very conservative or are using some sort of bucketing strategy where you have more than one year's worth of expenses, you might want to lock in rates for any amount greater than your first year of expenses. Certificates of deposit (CDs) from one to five years are very competitive. Treasury securities over the same terms are similar.

Multiyear guaranteed annuities (MYGAs) are similar in structure to CDs but are offered by insurance companies. They'll allow you to guarantee a competitive rate and defer income taxes until the end of their term.**

If I'd told you a few years ago that you could get about 5% in something guaranteed, I'd have had to tie you down to keep you from putting all your money there. I'm still in the boat of not overallocating to cash, but maximizing the yield on what you have in cash.

2. Look at guaranteed income

MYGAs are a type of fixed income designed for accumulation. MYGAs' cousins are fixed annuities structured for income. Fixed annuity guarantees in both forms are more attractive when interest rates are high.

Deferred income annuities (DIAs), single-premium immediate annuities (SPIAs) and indexed annuities with income riders all look a lot better than they did from 2010 to 2022.

These guarantees are a bit opaque in that you don't know exactly when they'll drop if the Fed cuts rates. But if you're thinking about retirement income and would like to guarantee some portion of it in exchange for liquidity and some upside exposure, it's worth looking into.

We lean on our planning software to compare your current situation with what it would look like with some amount of guaranteed income. Sometimes, it helps. Other times, it doesn't. You can access a free version of what we use here.

3. Re-evaluate your asset allocation

Financial companies benefit from a rising-rate environment. Three years ago, they would charge you 3% for a 30-year mortgage. Today, it's about 7%.

Are they paying you the full 4% delta in your checking account? They keep that spread, and spreads often increase as rates do.

Looking for expert tips to grow and preserve your wealth? Sign up for Adviser Intel (formerly known as Building Wealth), our free, twice-weekly newsletter.

Real estate investment trusts (REITs) benefit from falling rates because they can buy more with the same interest rate. The point is that different asset classes and sectors do well in different environments.***

If you are a DIY investor, it's probably going to take too much time and effort to try to increase or decrease exposure based on the interest-rate environment.

However, if you're working with a financial adviser, they should be paying attention to where we are and where we might be going.

A few years ago, the acronym TINA was popular, signifying the belief that There Is No Alternative to investing in stocks.

Stocks probably should still make up a significant portion of your portfolio, but for the other parts, there are many alternatives.

* Investment in a money market fund is neither insured nor guaranteed by the FDIC or any other government agency. Although money market funds seek to preserve the value of your investment at $1 per share, it is possible to lose money by investing in these funds.

** Annuities have fees, risks, limitations and restrictions. Withdrawals can be subject to income taxes and, if made before age 59½, to a 10% IRS penalty; surrender charges can also apply. All guarantees and benefits of the annuity are subject to the financial strength and claims-paying ability of the issuing insurance company.

*** Investments in Real Estate Investment Trusts (REITs) involve risks, including the potential loss of principal, illiquidity, and fluctuations in market value. Investors should carefully review all offering documents, risk factors, and tax considerations before making any investment decision. REITs may not be suitable for all investors.

Related Content

• Kiplinger Interest Rates Outlook: Fed's September Rate Cut Still Up in the Air
• How to Invest for a Fall Interest Rate Cut by the Fed
• Five Steps to Sorting Out Your Asset Allocation
• Five Big Beautiful Bill Changes and How Wealthy Retirees Can Benefit
• Five Mistakes to Avoid in Your First Year of Retirement

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

1. Estate tax changes under the OBBB

Question: Did the “One Big Beautiful Bill” (OBBB) make any changes to the federal estate and gift tax?

Joy Taylor: Yes. It increased the lifetime federal estate and gift tax exemption and made it permanent. For 2025 deaths, the exemption is $13,990,000, and the highest estate tax rate is 40%. This exemption amount was enacted in the 2017 Tax Cuts and Jobs Act, but it was temporary, set to expire after 2025 and drop to $7 million or so. The OBBB not only made the larger lifetime estate and gift tax exemption permanent, but also increased it to $15 million for 2026 deaths. This figure will rise each subsequent year to account for inflation.

The top federal estate tax rate remains 40%. The OBBB did not change this.

2. State death taxes

Question: Which states impose taxes upon death?

Joy Taylor: Most states do not impose taxes upon death. However, some do. Washington, D.C., and 12 states levy their own estate taxes on decedents. These states are Connecticut, Hawaii, Illinois, Maine, Maryland, Massachusetts, Minnesota, New York, Oregon, Rhode Island, Vermont and Washington. The estate tax exemption amounts in the 13 locales vary widely from state to state, and most are far below the federal exemption. Only Connecticut has hiked its estate tax exemption amount to close to the current federal level.

Five states have inheritance taxes. They are Kentucky, Maryland, Nebraska, New Jersey and Pennsylvania. As you can see, Maryland has an estate tax and an inheritance tax.

For more information, see 18 States With Scary Estate and Inheritance Taxes.

3. Estate tax portability

Question: I am married, and when I die, my estate will be less than the $15 million federal lifetime estate and gift tax exemption. Can any unused exemption be transferred to my spouse?

Joy Taylor: Yes. When you die, your estate can do this by making what is called a federal estate tax portability election. Portability allows a married decedent’s unused federal lifetime estate and gift tax exemption to pass to the surviving spouse. But transferring the unused exemption isn’t automatic. An estate elects portability by timely filing an estate tax return on IRS Form 706. Filing the Form 706 is required to elect portability, even if the estate is not otherwise required to file the 706 because its assets and previous taxable gifts made by the decedent are below the normal threshold amount for filing a federal estate tax return, which is $13,990,000 for 2025 deaths and $15 million for 2026 deaths.

4. The annual gift exclusion amount

Question: What is the annual federal exclusion amount for gifts made in 2025? And did the OBBB change this?

Joy Taylor: The annual federal gift tax exclusion is $19,000 per donee this year. This means in 2025, you can give up to $19,000 per person without paying federal gift tax, tapping your lifetime estate and gift tax exemption or filing a federal gift tax return. Here’s an example. Say you have two sons and three grandchildren, and you want to gift the maximum amount to each of your relatives, including your sons’ spouses, without having to file a gift tax return in 2025. The most you can give is $19,000 to each relative. That’s $133,000 in excludable gifts.

The OBBB didn’t change the annual gift tax exclusion. So for 2026, the amount will stay close to $19,000. It might be a bit higher because of inflation.

Note that recipients of your gifts will not owe federal income tax on the amount of the gift they receive. Gifts are excluded from gross income, no matter the amount.

5. Gifts over the exclusion amount

Question: I am planning to gift my son $100,000 this year. Do I have to pay federal gift tax on this?

Joy Taylor: It is unlikely that you will have to pay any federal gift tax on this gift to your son. Although the $100,000 gift would exceed the $19,000-per-donee annual gift tax exclusion amount, you will not owe any federal gift tax, provided that your total lifetime gifts don’t exceed the lifetime estate and gift tax exemption, which for 2025 deaths is $13,990,000. You will have to file a federal gift tax return on IRS Form 709 to report the gift to the IRS because the gift is over the $19,000 annual exclusion amount.

About Ask the Editor, Tax Edition

Subscribers of The Kiplinger Tax Letter, The Kiplinger Letter and The Kiplinger Retirement Report can ask Joy questions about tax topics. You'll find full details of how to submit questions in each publication.
Subscribe to The Kiplinger Tax Letter, The Kiplinger Letter or The Kiplinger Retirement Report.

We have already received many questions from readers on topics related to tax changes in the OBBB and more. We will continue to answer these in future Ask the Editor round-ups. So keep those questions coming!

Not all questions submitted will be published, and some may be condensed and/or combined with other similar questions and answers, as required editorially. The answers provided by our editors and experts, in this Q&A series, are for general informational purposes only. While we take reasonable precautions to ensure we provide accurate answers to your questions, this information does not and is not intended to, constitute independent financial, legal, or tax advice. You should not act, or refrain from acting, based on any information provided in this feature. You should consult with a financial or tax advisor regarding any questions you may have in relation to the matters discussed in this article.

More Reader Questions Answered

• All Ask the Editor Q&As
• Ask the Editor: Questions on the New Tax Law
• Ask the Editor: Questions on the $6,000 Senior Deduction
• Ask the Editor: Questions on home sales and taxes
• Ask the Editor: Questions on Inherited IRAs

When a parent passes away, their children are often left planning a funeral while navigating grief.

Driven by love and a desire to honor Mom or Dad, families spend countless hours selecting a venue, arranging catering, notifying friends and relatives.

They're also tasked with making deeply personal decisions such as whether to cremate or bury, what music to play or what should be engraved on the tombstone.

These decisions can feel overwhelming, and when siblings or extended family members have different ideas, it can also lead to friction.

The Kiplinger Building Wealth program handpicks financial advisers and business owners from around the world to share retirement, estate planning and tax strategies to preserve and grow your wealth. These experts, who never pay for inclusion on the site, include professional wealth managers, fiduciary financial planners, CPAs and lawyers. Most of them have certifications including CFP®, ChFC®, IAR, AIF®, CDFA® and more, and their stellar records can be checked through the SEC or FINRA.

That's why one of the most meaningful gifts you can leave behind isn't just your financial assets — it's guidance.

A family love letter is a personal document, separate from legal estate-planning tools, that outlines your preferences for how you want to be remembered and celebrated.

It offers loved ones the peace of knowing they're honoring your wishes, and it reduces the stress of guesswork during an already difficult time.

What to include in a family love letter

This letter can spell out your preferences for your end-of-life celebration, including details such as:

• Open or closed casket
• Burial or cremation
• Who you'd like as pallbearers
• Music you'd like played
• Whether there's a particular florist or caterer you prefer
• What you'd like engraved on your tombstone
• Whether you've prepaid for a funeral, burial plot or death certificates

My 89-year-old Aunt Patty prepaid for five death certificates so her kids wouldn't have to deal with the hassle. All the paperwork was ready at the funeral home, and no one had to scramble to figure out how to get certified copies for the bank, the insurance company or the Social Security office. It was a small step that made a big difference.

Even if you've had conversations with your family before, writing everything down leaves nothing open to interpretation. It can also help clarify your values and what's most important to you being remembered, honored and communicated.

Avoiding conflict during a difficult time

The idea for the letter came to me after my mom passed away. My sister and I had different ideas about how to plan her celebration of life, and when emotions are already running high, even small decisions can spark tension.

Our biggest disagreement was what to write on her tombstone. We ultimately found a solution by walking 50 yards to our grandmother's grave and copying the inscription, thinking, "If this is what Mom chose for her mother, it's probably what she'd want for herself, too."

That moment stayed with me. I realized that if my mom had simply told us what she wanted, or written it down, it could have spared us a painful argument.

The letter gives your children (and other loved ones) clarity and the reassurance that they're doing right by you.

Share it and talk about it

Once you've written your letter, don't tuck it away. Hold a family meeting to go over it. Walk them through your end-of-life wishes and give them a copy.

This is also a natural opportunity to explain who holds your power of attorney for financial and medical decisions, who your executor is and why you made those choices. Sharing this context up front can ease tensions and prevent resentment.

If you have a living trust, it's also a smart time to give them a copy so they're not scrambling to find it later.

You might also consider having everyone present sign a short document confirming they attended the meeting and heard your wishes firsthand. This kind of documentation could help resolve future legal challenges by showing that your intentions were clearly communicated and acknowledged.

A love letter, not just a list

Your letter isn't just about logistics; it's a final act of care. It can include messages of gratitude, reflections, even a few last words you'd like your family to hear. It doesn't need to be formal or poetic, just honest and from the heart.

Looking for expert tips to grow and preserve your wealth? Sign up for Building Wealth, our free, twice-weekly newsletter.

While some people use this letter to jot down personal requests about belongings, pets or household accounts, we'll explore those often-overlooked details in the next installment of this series.

Those practical issues, such as who gets Grandma's ring, what happens to the dog or how to keep the lights on, can create surprising complications if they're not addressed. Fortunately, they're easy to plan for with the right approach.

A win-win for you and your family

Today's families are more blended, more geographically spread out and often more complex than in generations past. The family love letter is a way to bring clarity and unity at a time it's needed most.

It lets your children and loved ones focus on what matters: honoring your life and legacy without the stress of second-guessing your wishes. It's a powerful final gift and an essential part of a thoughtful estate planning playbook.

In the next installment of this series, we'll go beyond the funeral and explore how to plan for the everyday details that are often overlooked, including who should inherit meaningful family heirlooms, how to ensure pets are lovingly cared for and what to do about bills and household logistics while the estate is being settled.

These small decisions can create big stress if left unaddressed, and your playbook can help prevent that.

Securities and insurance services offered through Osaic Wealth, Inc. member FINRA/SIPC. Investment advisory services offered through NWF Advisory Services, Inc. Osaic Wealth is separately owned and other entities and/or marketing names, products or services referenced here are independent of Osaic Wealth.

Related Content

• Six Ways to Make Talking With Family About Estate Planning Easier
• Inheritance, Simplified: How Assets Are Passed Down
• Tony Bennett's Daughters Share Thoughts on How to Prevent Inheritance Disputes
• How to Organize Your Financial Paperwork for Your Heirs
• Summer Is Made for Sun, Fun … and Estate Planning Conversations

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

But businesses and wealthy households should not rest on their laurels.

On one hand, the timing of President Trump's domestic spending bill removes a great deal of uncertainty.

Americans now have the rest of 2025 to digest and prepare for the changes in the One Big Beautiful Bill (OBBB), compared to when the Tax Cuts and Jobs Act (TCJA) was passed into law in December 2017 and we only had a handful of days.

No one likes uncertainty. It's worth looking back to the end of 2020, after President Biden's victory at the polls. Families scrambled to call their estate attorneys. They rushed through massive gifts, transferred assets and finalized trusts in case the exemptions, which were doubled under the TCJA, would be rolled back to the 2017 exemption amount of $5.49 million, or even lower.

The Kiplinger Building Wealth program handpicks financial advisers and business owners from around the world to share retirement, estate planning and tax strategies to preserve and grow your wealth. These experts, who never pay for inclusion on the site, include professional wealth managers, fiduciary financial planners, CPAs and lawyers. Most of them have certifications including CFP®, ChFC®, IAR, AIF®, CDFA® and more, and their stellar records can be checked through the SEC or FINRA.

That haste created the risk of missed opportunities and rash decisions. Now, investors face the risk of complacency. The temptation to put off estate planning may feel stronger now than before.

But this is the perfect time to take advantage of the opportunities that the new tax Act offers. This could be the most consequential tax package passed in decades.

We have a rare window of predictability and the chance to learn how the consequences of these changes might impact our financial lives.

Planning without pressure?

The estate tax exemption is only "permanent" in the sense that it does not have a built-in expiration date, as it did when introduced by the TCJA. Political power swings like a pendulum between two parties, so there's no guarantee it will never change again.

Trump's OBBB passed through the budget reconciliation process on tight margins, and it is not out of the question that a future administration could undo the changes with even narrow majorities in both houses of Congress.

But if it does happen, it won't happen tomorrow. We tend to see clients put estate planning on the back burner when uncertainty disappears. They assume they have all the time in the world. And then life intervenes.

Building a sophisticated estate plan takes time. Drafting, reviewing, revising and getting comfortable with the terms of your plan isn't something you want to rush if you don't have to. Do the work now, while you have the luxury of time to craft a thoughtful strategy.

Even if you already have an estate plan, it is worth reexamining it anyway. Many were drafted under old exemption limits, and outdated documents may have unintended consequences as a result of changing legislation.

For example, an estate plan drafted in 2011 may have been designed to capture the $5.49 million exemption in an irrevocable trust for federal estate tax purposes but might now automatically receive far more of a decedent's assets. That's especially true after years of market gains.

Giving with intention

The OBBB provides a strong impetus to review your financial structures. But beyond the tax benefits, it's equally important to ensure your estate plan aligns with your evolving goals and objectives. Your current plan may not be in sync with these objectives if it hasn't been updated in a while.

A giving strategy should reflect more than just tax savings. It's also an opportunity to create a legacy that continues many generations into the future.

When kids and grandkids inherit money without context, they tend to also inherit confusion. They don't know where the money came from, what it means to the family or what it's meant to support. This can create conflict and deter your legacy.

Although it's important to make sure your heirs understand what they will inherit, they should also understand how their inheritance can be used to carry on family values.

Looking for expert tips to grow and preserve your wealth? Sign up for Building Wealth, our free, twice-weekly newsletter.

So before you transfer dollars, transfer meaning. What does this wealth represent? What do you want it to support? What legacy are you trying to leave, not just financially, but emotionally and culturally?

We encourage our clients to start talking to their heirs from a young age about values and the history of how the family wealth was built. While you can optimize every part of your estate plan to take advantage of the new tax laws, it could still fall short of your intentions if your values are not shared with your loved ones and successors.

Other pertinent provisions

There are far too many changes in the OBBB to cover in a single article, but I want to highlight just a few others that are of interest to our clients.

The benefits of permanent tax brackets and estate tax exemptions allow families to remove some of the biggest wild cards in their long-term plans. They can strategize around known income tax rates when structuring trusts, planning retirement distributions or evaluating strategies such as Roth conversions.

There are now tighter limits and caps on charitable giving deductions for those who itemize, including a 35% cap on the benefit and a floor of 0.5% of income. This makes it more important to align charitable gifts with planning windows and income flows. Donors may want to frontload gifts or use strategies like donor-advised funds more carefully.

On the business side, the permanent 100% bonus depreciation rate for property assets, such as machines and factories, allows for immediate expensing of capital investments, such as equipment, which helps business owners optimize cash flow and defer taxes during profitable years.

This is especially helpful for entrepreneurs or family-owned firms reinvesting in operations.

The Section 199A pass-through deduction for qualified business income will be permanent, with a slight increase in certain cases. This supports a wide range of LLCs, S corps and sole proprietorships and is particularly important for families with business ownership in their wealth mix.

Don't look at the OBBB as a reason to take your foot off the pedal. Instead, take advantage of what its provisions can offer, and the time and clarity to plan your estate strategy.

You have the peace of mind that comes from the elimination of some short-term uncertainty.

You can prepare to transfer your values along with your wealth.

And most importantly, you can watch your family grow and enjoy their prosperity while you're still with them.

Neither RBC Wealth Management, a division of RBC Capital Markets, LLC, nor its affiliates or employees provide legal, accounting or tax advice. All legal, accounting or tax decisions regarding your accounts and any transactions or investments entered into in relation to such accounts, should be made in consultation with your independent advisors. No information, including but not limited to written materials, provided by RBC WM or its affiliates or employees should be construed as legal, accounting or tax advice.

RBC Wealth Management, a division of RBC Capital Markets, LLC, registered investment adviser and Member NYSE/FINRA/SIPC.

Related Content

• Want to Create a Lasting Legacy? Four Issues to Address
• What Will They Remember About You? It's Not Just About Your Money
• Are Your Kids Ready to Inherit Your Wealth?
• Dividing an Estate? Five Ways to Create Transparency
• An Attorney's Guide to Your Evolving Estate Plan: Set-It-and-Forget-It Won't Work

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

This flexibility can be incredibly helpful when business opportunities arise or family members need support. Liquidity options can also offer tax and estate planning advantages — helpful for those looking to minimize capital gains and pass on wealth.

As with any financial strategy, it's essential to understand the ins and outs before putting the plan in motion.

The Kiplinger Building Wealth program handpicks financial advisers and business owners from around the world to share retirement, estate planning and tax strategies to preserve and grow your wealth. These experts, who never pay for inclusion on the site, include professional wealth managers, fiduciary financial planners, CPAs and lawyers. Most of them have certifications including CFP®, ChFC®, IAR, AIF®, CDFA® and more, and their stellar records can be checked through the SEC or FINRA.

Think of it like preparing for a race:

• Ready means understanding your options
• Set is about weighing the benefits against the tradeoffs
• Fund is the confident execution of your strategy

Getting into formation this way sets you up to compete — and win — at your short-term goals. And as a financial adviser with extensive experience helping investors navigate these opportunities, I'm here to help you through it.

Ready: Understanding your options

Liquidity strategies typically fall into the following three categories: Asset accounts, secured credit and unsecured credit.

• Asset accounts. These are vehicles that offer quick access to cash with minimal disruption, such as savings accounts and cash management accounts, money market accounts, and investments in short-term bonds or money market funds within taxable investment accounts
• Secured credit. This refers to loans that leverage existing assets to unlock liquidity, such as margin loans, home equity lines of credit (HELOCs) and 401(k) loans
• Unsecured credit. This pertains to options that don't require collateral, such as personal loans, credit cards and intrafamily loans

There are many options within each category, and each comes with its own considerations.

The key to selecting one is understanding how these tools fit into your overall financial picture and align with your goals and risk tolerance.

Set: Exploring the risks and benefits

Across the three liquidity categories, many of my ultra-high-net-worth clients find short-term bonds, margin loans and intrafamily loans to be well suited to their needs.

Short-term bonds are fixed-income investments with maturities typically under three years. They offer a relatively stable way to park cash and can help you avoid high-interest borrowing costs.

For example, if you need $250,000 and are considering a loan with an 8.5% interest rate, you could end up paying about $10,625 in interest over six months.

If you had that amount invested in short-term bonds instead, you could sell them to access the funds — potentially avoiding the borrowing cost and triggering little to no capital gains if sold near maturity.

That said, short-term bonds generally offer lower returns than other investments and are still subject to the following risks: inflation and interest rate risks, reinvestment risks and credit risks. These can affect their value and yield.

Margin loans involve borrowing against the value of an investment portfolio. They typically don't require a credit check or loan origination fees, and once your account is approved, funds can often be accessed within a day.

Looking for expert tips to grow and preserve your wealth? Sign up for Building Wealth, our free, twice-weekly newsletter.

Loan amounts are generally higher — up to 50% of the value of marginable securities — and repayment terms can be flexible.

In some cases, the interest paid on margin loans may also be tax-deductible, so it's important to consult with both a financial adviser and tax professional to determine what implications are applicable.

Margin loans come with inherent risks, including margin calls, which can force you to deposit additional funds or sell securities at a loss if the value of the collateral drops.

Therefore, they are best suited for individuals with substantial assets due to their sufficient financial resources and overall risk tolerance.

Intrafamily loans are private lending arrangements between family members, often documented with formal terms that meet IRS requirements.

They allow families to set their own repayment schedules and interest rates and can serve as a strategic tool for multigenerational support — keeping assets within the family without requiring credit checks or liquidating investments.

However, if not properly structured, they can lead to unintended tax consequences and IRS scrutiny. They also carry the potential for family tension if repayment becomes an issue.

With these pros and cons in mind, you are now well-equipped to select the best approach and get set for a successful launch.

Fund: Implementing with confidence

Now, here comes the fun part — implementing with clarity and confidence. If you're comfortable doing this yourself, go for it. But if not, you can always lean on a financial adviser.

In some cases, it can make a meaningful difference. In a recent Vanguard survey, 86% of investors reported having more peace of mind when they used an adviser service than when managing finances on their own.

Lastly, remember that liquidity isn't just about having cash on hand — it's about having options.

While all investing is subject to risk, including the possible loss of money, maintaining a balanced and diversified approach can help manage risk and support long-term stability.

With the right strategy, you can stay nimble, seize opportunities and support your goals without sacrificing long-term growth. Because when life moves fast, your finances should be ready to keep up.

Related Content

• Are You Jeopardizing Your Future to Help Your Adult Kids? An Expert Guide for How to Not Do That
• Intrafamily Loans Can Be a Smart Move to Boost Wealth
• Do You Need a Family Office? Four Signs for the Very Wealthy
• 4 Ways to Prepare for a Personal Financial Crisis and Keep Goals on Track
• Your Family Money Values Matter: How to Get on the Same Page

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Many asset management groups, private banks and multifamily offices are reporting a notable spike in interest among clients looking to set up banking and investment accounts in "safe haven" jurisdictions such as Switzerland.

Whether clients are motivated by portfolio diversification, geopolitical anxiety or simply personal ties abroad, international estate planning raises complex legal and tax considerations that should be addressed well in advance of any cross-border moves.

The Kiplinger Building Wealth program handpicks financial advisers and business owners from around the world to share retirement, estate planning and tax strategies to preserve and grow your wealth. These experts, who never pay for inclusion on the site, include professional wealth managers, fiduciary financial planners, CPAs and lawyers. Most of them have certifications including CFP®, ChFC®, IAR, AIF®, CDFA® and more, and their stellar records can be checked through the SEC or FINRA.

For tax professionals advising clients on outbound planning strategies, it's important to emphasize best practices, common pitfalls and actionable solutions to ensure their global assets complement — rather than complicate — their long-term estate planning and tax objectives.

Here are some of the most important factors for internationally minded high-net-worth individuals to keep in mind.

Who should hold assets abroad?

Holding assets abroad isn't for everyone. For one, individuals should be dealing with a large enough sum — typically $1 million as a minimum, but $2 million as a practical starting point — to justify the associated legal, reporting and compliance burdens.

They also should have a sufficiently compelling reason to move these significant sums overseas. To determine motivations, consider questions like:

• Are you seeking currency diversification?
• Do you have dual citizenship or spend significant time abroad?
• Are you investing in local businesses or real estate overseas?

If the answer is primarily "I'm scared of what's happening in the U.S.," it's important for tax advisers to offer a reality check.

Clients may think that holding assets abroad offers protection from domestic risks like asset seizure, without understanding the nature of U.S. tax and reporting requirements, not to mention international treaties.

If they're only interested in diversifying beyond the U.S. dollar, remind them that this can usually be accomplished domestically using international funds or foreign currency accounts at U.S. institutions, avoiding the headaches and complexity associated with offshore accounts.

For people who have dual citizenship, family overseas, travel frequently or invest in companies in other countries, however, this could still be a smart strategy.

Tax reporting and income considerations

Of course, outbound planning may dramatically increase tax complexity for Americans, who are taxed on worldwide income and their estate.

Advisers should be sure to explain to clients that they will need to meet foreign asset reporting requirements and to detail foreign income — such as interest, dividends and capital gains — on their U.S. tax returns.

Also be sure to remind them that inaccurate or incomplete filings can trigger substantial penalties, even for inadvertent violations, lest they try to hide income to safeguard against seizure.

Moreover, it is necessary to walk through the assets clients propose to move abroad, and also what they plan to invest in. Not all foreign investments are created equal.

Certain investments that may seem equivalent to securities in the U.S. may actually be mutual funds or pension funds that could be treated as passive foreign investment companies and come with considerably more legal complications.

Choosing the right jurisdiction

People may assume any stable foreign country will suffice for asset holding. In reality, estate planning consequences vary dramatically based on the chosen jurisdiction. Key factors to evaluate include:

• Treaty protections. The U.S. has estate and income tax treaties with many countries — including popular destinations like the U.K., Germany and Switzerland — that may provide relief from some forms of double taxation and clarify the treatment of foreign assets.
• Estate planning laws. Different countries can take markedly different approaches to estate planning and inheritance. It is vital to confirm that local law will recognize U.S. estate planning documents or draw up estate plans under the jurisdiction's laws.

U.S. tax professionals who aren't experienced with the jurisdiction in question should collaborate with local estate planning attorneys and financial advisers who understand the country's laws and reporting requirements.

This can help ensure compliance both in the U.S. and locally, protecting the client's assets while still aligning with their financial goals for moving assets abroad in the first place.

Coordinating domestic and foreign estate plans

One of the most overlooked elements of international estate planning is coordination between U.S. and foreign legal instruments. While some clients ask about using an "international will," these are often blunt instruments.

In practice, the better approach is to have local lawyers execute jurisdiction-specific wills for each country where significant assets are held.

These documents must be tailored to local probate procedures and tax rules to ensure assets pass smoothly and avoid unintended consequences, while also specifying the beneficiaries for these specific assets.

For people with a mix of international holdings, the cost of multiple wills may seem burdensome — but it pales in comparison to the time and expense of untangling multiple probate conflicts after death.

Looking for expert tips to grow and preserve your wealth? Sign up for Building Wealth, our free, twice-weekly newsletter.

A recent cautionary tale involved a U.S. client holding assets in New Zealand without a local will. Upon their death, the estate was forced into double probate — one in the U.S. that would not otherwise be required and another in New Zealand — nearly consuming all the assets in legal fees and considerably lengthening the process.

Had the client executed a simple will under local law, this could have been avoided.

Preventing practical hurdles

Legal compliance is only half the battle. Individuals and their advisers must also confront practical challenges in working with foreign financial institutions and local authorities.

A clear example of these practical hiccups came from a client with assets in a bank that did not have U.S. subsidiaries or ties.

After the client died, the bank imposed significant administrative roadblocks, delaying distribution for two calendar years, even though the law entitled the surviving spouse to the funds.

Local banks unfamiliar with U.S. estate procedures may also lack the infrastructure or appetite to facilitate smooth transfers, particularly after someone dies.

Banks with international operations or U.S. subsidiaries tend to be easier to work with.

Either way, U.S. advisers should proactively engage with foreign institutions or local adviser partners to understand their internal protocols and ensure that clients' heirs will be able to access assets without undue friction.

Planning for peace of mind

International estate planning is not for the faint of heart, but for people with legitimate reasons and the right advisers, it can offer valuable benefits — whether for lifestyle, family or investment purposes. The key is approaching it with rigor, transparency and careful coordination across jurisdictions.

Tax professionals are in a unique position to help clients navigate this complex terrain, ensuring that the client's global footprint does not become a posthumous liability.

With careful planning, families can preserve wealth across borders and generations.

Related Content

• A Checklist for High-Net-Worth Individuals: How to Protect and Grow Your Wealth
• Nine Types of Trusts for High-Net-Worth Estates
• Best Banks for High-Net-Worth Clients
• Three Actions to Protect Wealth Transfer Amid Tax Uncertainty
• Prepare for 2026 Estate Planning With SPATs, SLATs and DAPTs

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.