7 Ways To Pass Generational Wealth Tax-Free

Core Insights - Generational wealth can incur significant tax burdens for heirs, making estate planning essential for tax-efficient transfers [1] Group 1: Tax Strategies for Generational Wealth Transfer - The lifetime gift tax exemption allows individuals to pass down up to $19,000 tax-free in 2025, an increase from $18,000 in 2024 [7] - An Irrevocable Life Insurance Trust (ILIT) is a useful tool for passing down generational wealth tax-free, as proceeds go directly to the trust upon the insured's death [2][3] - The step-up in basis provision allows inherited assets to be valued at fair market value at the time of the original owner's death, eliminating taxes on unrealized appreciation [4][5] Group 2: Advanced Trust Structures - Generation-Skipping Trusts (GSTs) enable direct asset transfers to grandchildren or future generations, avoiding estate taxes for the intervening generation [6]