As Congress debates whether today’s historically high estate tax exemption will expire on December 31, 2025, families – especially those with high-net-worth – have a narrowing window to lock in financial protections for the next generation.
Currently, each individual can gift up to approximately $14 million tax-free during their lifetime – or at death – without triggering federal estate taxes. For married couples, that number doubles. However, unless legislation is passed to extend this exemption, the amount will revert to around $7 million per person at the end of 2025. That change could cost families millions in taxes.
“We see this as an opportunity,” says Jeffrey Fratarcangeli, founder and CEO of Fratarcangeli Wealth Management. “For families who have built significant wealth, now is the time to act. The good news is that the tools to protect and transition your assets already exist; you just have to use them strategically.”
Below are four “no-nonsense” moves Jeffrey Fratarcangeli recommends as best practice for a smooth wealth transition.
Put an Asset Protection Trust in Place Early
The first step, Fratarcangeli says, is preparing for life’s “what-ifs” while you’re still alive. An asset protection trust can authorize trusted individuals to access your accounts, pay your bills and manage your financial affairs if you become incapacitated, without requiring court intervention.
“If you don’t have the right structure in place, your loved ones could be forced to go through the courts just to access your accounts,” Fratarcangeli warns. “An asset protection trust keeps that control in the family.”
The same trust provides continuity and privacy after death by keeping your estate out of probate, a lengthy and often public court process used to settle estates without a trust.
“When you avoid probate, you avoid delays, publicity and uncertainty,” Fratarcangeli notes. “Instead, the trust spells out exactly who receives what, and financial institutions can act directly on those instructions.”
Use a Dynasty Trust to Lock in Today’s Values
For assets likely to appreciate, including real estate, private businesses or limited partnership interests, a dynasty trust allows families to lock in current values and shield future growth from estate taxes.
“Let’s say you own an illiquid asset like a private company,” Fratarcangeli explains. “We can apply a discount valuation and move a portion of it into the trust under the current lifetime exemption. If it doubles or triples in value down the line, that appreciation happens outside of your estate, and outside of estate tax.”
These trusts can span multiple generations, further helping to preserve wealth long-term.
“It’s legacy planning on autopilot,” he says.
Use a Three-Pillar Approach to Reduce Estate Tax Exposure
For families whose assets exceed the current (or future) exemption, Fratarcangeli emphasizes that there are three reliable ways to reduce or eliminate estate tax burdens:
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Charitable Giving:
Donations to qualified charities are fully excluded from estate tax calculations.
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Irrevocable Life Insurance Trust:
Keeps life insurance proceeds outside the estate and can provide liquidity for estate taxes or support heirs directly.
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Dynasty Trust:
Removes appreciating assets from the taxable estate and protects growth.
“These are the three pillars that can help you disinherit the IRS,” Fratarcangeli says. “They each serve a different purpose, but together, they create a comprehensive, proven strategy to preserve wealth for future generations.”
Make Smart Moves Before the Clock Runs Out
With the current estate tax exemption set to expire at the end of the year, now is the time to review your plans.
“Whether you gift during life or let your estate handle it after death, anything above the limit will be taxed at 40%,” Fratarcangeli cautions. “Waiting too long to put a proper inheritance plan in place could cost families millions.”
He’s urging his clients to coordinate now with both his team of wealth advisors and experienced estate planning attorneys. Fratarcangeli Wealth Management works hand-in-hand with a nationwide network of top estate attorneys and advisors to ensure clients are not only implementing smart strategies but doing so with the appropriate legal and financial teams in place.
“We interpret the options, then coordinate the right mix of professionals that will support our client’s wealth transition goals,” Fratarcangeli says. “When everyone’s at the table early, the transition is smoother, the taxes are lower and the stress is dramatically reduced.”
Plan Now to Preserve More in the Long Run
No one wants to think about end-of-life planning. But the reality is that a well-structured wealth transition isn’t just about numbers; it’s about protecting your legacy and saving your family from avoidable complications later on.
With proactive planning, families can avoid probate, reduce tax exposure and ensure assets go exactly where they’re intended.
“Modern wealth transition isn’t about chasing the next big loophole,” Fratarcangeli concludes. “It’s about using the tools the law already gives us clearly, decisively and before the window of opportunity changes.”
For more insight from Jeffrey Fratarcangeli, visit www.fratarcangeliwealth.com.
Securities offered through Thurston Springer Financial, a registered Broker-Dealer (Member FINRA & SIPC). Investment advisory services offered through Thurston Springer Advisors, a SEC-Registered Investment Advisor. Insurance products offered through Thurston Springer Financial, an Indiana Insurance Agency.
Jeffrey Fratarcangeli and Fratarcangeli Wealth Management do not provide tax or legal advice.
The information contained herein constitutes general information and is not directed to, designed for, or individually tailored to, any particular investor or potential investor. This is not intended to be a client-specific suitability or best interest analysis or recommendation, an offer to participate in any investment, or a recommendation to buy, hold or sell securities.
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