Tier 2
High Net Worth Estate Planning
Clients $10 Million – $25 Million
“Families and individuals with estates valued between $10 million and $25 million are among the most affected by changes to the Federal Estate Tax Exemption, which is currently just under $14 million. This exemption is scheduled to drop to $7 million on January 1, 2026. The outcome of the new tax bill under consideration in Congress could further impact this exemption.
Those in Tier 1, our Core Estate Planning group, are not significantly affected by the change. Even after the reduction, a married couple will still be able to pass $14 million to their heirs without incurring Federal Estate Tax.
At the other end of the spectrum, families in the Ultra High Net Worth category – Tier 3 – already face estate tax exposure, regardless of whether the exemption is $7 million or $14 million. For them, the challenge remains the same, and advanced planning strategies should be used now to lock in today’s exemption amount, as we explain in detail on our High Net Worth page and in our YouTube videos.
The group that must be especially proactive is Tier 2 – those in our High Net Worth Estate Planning category. Tier 2 clients do not have an Estate Tax problem currently. However, in the future there are two factors that come into play: the possibility of the Exemption being cut in half, and the strong likelihood that their assets could double in value over the next decade. Without action, they may find themselves in a difficult position. Tier 2 strategies, which we outline on this page, are designed to help mitigate that risk and preserve more of their legacy.”
– Matt Dana, Founder
Tier 2 strategies have four common elements:
- They have an Estate Tax reduction component.
- They are relatively easy to set up and understand.
- They require very little, if any annual maintenance.
- Clients maintain “use and enjoyment” of the Assets.
Strategies Embraced by Tier 2 Clients:
These clients need Core Estate Planning, plus they must implement one or two of the Tier 2 Trusts and strategies discussed below. Core Estate Planning is essential for all clients. As a client’s net worth increases, so does the number of additional Trusts needed to solve the Estate Tax problems for the clients.
Life Insurance to create liquidity to pay Estate Taxes
- Creating an Irrevocable Life Insurance Trust to hold that Life Insurance is critical.
- Keeps the Life Insurance out of the Estate Tax system.
- Life Insurance is Income Tax Free, but it is not Estate Tax Free unless set up properly.
Qualified Personal Residence Trusts
- Removes your Primary and Secondary residences from the Estate Tax System.
- You can continue to live in the home.
- Only uses a small portion of your Estate Tax Exemption.
Fantastic tool to “leverage” your Exemption.
Gift Tax Annual Exclusion
- Allows you to make annual gifts to your children and grandchildren without using any of your Federal
- Gift Tax Exemptions.
Exclusion amount rises each year tied to inflation. This year it is $19,000 per done. Husband and Wife can gift $38,000 per year. - No Income Tax Deduction.
But the thunder is reducing your Estate without using any Exemptions. - Sometimes these gifts can be made to a Life Insurance Trust, to pay for the premiums. This technique is called a “Crummy Trust”.
Charitable Planning
- Charitable Remainder Trusts to defer Capital Gains and to reduce Estate Taxes.
- Charitable Lead Trusts to create Income Tax deductions.
- Incorporating more sophisticated techniques with the IRAs using a Charitable Lead Trust.
- Probably not ready for a Private Family Foundation just yet until you get closer to that $20 Million mark.
- $10–20 Million Clients
- 103
- $20–50 Million
- 140
- $50–100 Million Clients
- 49
- Large Farmers in Yuma and Casa Grande
- 5
- Owners of Professional Sports Franchises
- 3
- CEOs of Publicly Traded Companies
- 7
- Former NBA Stars
- 2
AND Countless Doctors, CPAs, Financial Planners and other Professionals
What’s the Process?
Submit an inquiry as provided below and we will email you a simple two-page “Fact Finder” so we can collect some general information about you so that we can assign the appropriate lawyer for you and choose the most appropriate office location to meet. We can also offer a Zoom conference if more convenient.
2. Request an Attorney (Optional)
From our Attorney bios on this website, if you see an Attorney that you would like to work with, make that request in your submission.
Once you submit your Fact Finder, we will call you to schedule a Complimentary Initial Consultation to see if we are a good fit.
During your initial consult, we will quote a flat fee for each “design session” needed in designing your new Revocable Trust. For Tier 2 clients, there needs to be at least 2 design sessions and potentially 3, depending on how many strategies we want to explore. A Tier 2 client is more of a “custom home” then a Tier 1 client. The client may choose to implement only the Core Estate Planning documents now and save the Tier 2 strategies for later. However, bundling multiple strategies at once will result in lower per-trust costs.
5. Flat Fees Quoted to draft and Implement your Trust
After your design sessions, our attorneys will quote a flat fee to draft and implement your Revocable Trust.
Estate Planning with Purpose™
Protecting the Lives You Love
We understand that it is not death that we are dealing with, it is the lives of those left behind that matter. Estate Planning with Purpose™ is about living. It is about their peace of mind and financial security.
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Helpful Articles
Frequently Asked Questions
Why is estate planning more complicated if my net worth is between $10 million and $25 million?
Even if you don’t have an estate tax issue today, that could change in the future. A lower exemption and continued asset growth can create unexpected tax exposure, making early planning important to protect your estate.
Why do I need to review my estate plan regularly?
Your estate plan should evolve as your financial situation and the law change. Regular reviews help ensure you don’t unintentionally create a future estate tax problem as your assets increase or exemption thresholds shift.
Can I reduce future estate taxes without giving up control of my assets?
Yes, many strategies are designed to reduce estate tax exposure while still allowing you to use and benefit from your assets during your lifetime. The goal is to preserve flexibility while gradually moving assets out of your taxable estate.
What are the most common strategies used at this level?
Common strategies include Qualified Personal Residence Trusts (QPRTs), life insurance to create liquidity, gifting strategies, and charitable planning. These approaches are typically structured to be effective without adding significant complexity or ongoing maintenance.
Do I need more than a basic revocable trust?
In most cases, yes, because a simple trust may not account for future estate tax exposure. As your net worth grows, a more customized plan with additional strategies can help prevent costly mistakes and better protect your legacy.