Estate planning scales with the balance sheet. Layering on irrevocable trusts before you need them burns
money and flexibility; ignoring them once you are over the exemption hands 40% to the IRS. Use net worth as
the trigger.
Table 23.1: Estate Structures by Net Worth
Networth/
situation
Prioritiesandstructures
Any
adult
Will,
durable
financial
power
of
attorney,
advance
healthcare
directive
with
HIPAA
authorization,
current
beneficiary
designations.
Minor
children:
guardian
nominations
and
term
life
sized
to
raise
them.
Under
~$1M,
owns
a
home
or
has
minor
children
Add
a
funded
revocable
living
trust
(probate
avoidance
plus
a
successor
trustee
for
incapacity),
a
pour-over
will,
TOD/POD
coordination,
and
a
personal
umbrella
liability
policy.
~$1M–$15M
(under
the
federal
exemption)
Add
entity
segregation—an
LLC
per
rental
or
operating
business;
an
ILIT
if
heirs
will
need
liquidity;
watch
for
state
estate
tax
(often
$1M–$7M
thresholds)
and
use
a
bypass
trust
to
capture
both
spouses’
state
exemptions;
consider
a
DAPT
for
liquid
wealth.
Over
$15M,
or
trending
there
Begin
active
estate-tax
reduction
now,
while
the
asset
is
small:
annual
and
lifetime
gifting,
SLATs,
GRATs,
sales
to
an
IDGT,
a
QPRT
for
the
residence,
and
a
dynasty
trust
funded
with
allocated
GST
exemption.
Decide
deliberately
between
portability
and
a
bypass
trust.
Use
PPLI
for
tax-efficient
insurance.
$50M+
/
multi-generational
Add
a
family
office,
directed
and
situs
trusts
(South
Dakota,
Nevada,
Delaware),
possibly
a
private
trust
company,
perpetual
dynasty
planning,
and
a
structured
philanthropy
program
(donor-advised
fund,
CRT,
or
private
foundation).
The tiers are cumulative: each level keeps everything below it. And the single highest-leverage move is
timing—a $3 million company gifted into a dynasty trust today, before it becomes a $30 million
company, transfers the entire $27 million of growth out of your estate for the cost of $3 million of
exemption.