Minimize Estate and Inheritance Taxes with These Wealth-Saving Legal Tools

For high net-worth families, estate planning is more than just drafting a will—it’s about protecting wealth for generations to come. As federal estate tax laws are poised for major changes in 2025, the clock is ticking for those who want to preserve their legacy and avoid costly tax consequences. Minimizing estate taxes isn’t just a financial tactic—it’s a strategic safeguard for the assets you’ve spent a lifetime building.

At DuFault Law, we partner with high-net-worth families to craft forward-thinking estate plans that reduce tax burdens and align with long-term goals. Whether you’re planning a business succession, navigating charitable giving, or preparing to transfer significant assets, understanding your legal tools is key. In this guide, we break down the most effective strategies—like lifetime gifting, tax-advantaged trusts, and philanthropic planning—to help you protect your estate and pass on more of what matters.

Why Estate Tax Planning Matters

The federal estate tax exemption is generous, but not limitless. In 2024, individuals can shield up to $13.61 million from federal estate taxes—but this historic high won’t last. Without legislative action, the exemption is set to drop by more than half in 2025, potentially to around $6.4 million per person. That means any estate value above the threshold could be hit with a hefty 40% federal estate tax. For high-net-worth families, the difference could amount to millions in avoidable taxes.

And while Florida doesn’t impose a state estate tax, families with real estate, businesses, or investments in tax-heavy states like New York, Massachusetts, or Oregon may still be at risk. In other words, residency alone doesn’t eliminate exposure. With these changes on the horizon, proactive and holistic estate tax planning isn’t just smart—it’s essential.

Strategy #1 | Lifetime Gifting

One of the simplest ways to reduce your taxable estate is to give assets away during your lifetime. Strategic gifting allows you to transfer wealth to your loved ones while you’re still here to guide and support them—and it comes with powerful tax advantages.

Under the annual gift tax exclusion, you can gift up to $18,000 per person each year (or $36,000 as a married couple) without dipping into your lifetime exemption. When multiplied across multiple recipients—such as children, grandchildren, or other beneficiaries—these tax-free gifts can substantially shrink your estate over time.

On top of that, the current lifetime gift tax exemption of $13.61 million per individual ($27.22 million for married couples) offers a unique opportunity to make larger transfers without immediate tax consequences. But this window may be closing: the exemption is set to sunset in 2025, potentially slashing your tax-free giving power by more than half.

Take, for example, a couple with $25 million in assets. By combining annual exclusion gifts with larger planned transfers under the lifetime exemption, they can reduce their estate tax exposure while empowering the next generation—today. It’s a proactive, purposeful strategy that preserves both wealth and legacy.

Annual Gift Tax Exclusion

• In 2025, you can gift up to $18,000 per person per year (or $36,000 as a couple) without triggering gift tax.
• These gifts don’t count against your lifetime estate exemption.

Lifetime Gift Tax Exemption

• In 2024, this matches the federal estate tax exemption: $13.61 million per person (scheduled to drop in 2025).
• Gifting assets now locks in the current higher exemption.

Strategy #2 | Set Up Tax-Advantaged Trusts

Think of trusts as the secret weapon in high-net-worth estate planning—powerful, flexible, and often essential to protecting what you’ve built. When structured correctly, trusts can significantly reduce estate taxes, shield assets from creditors, and ensure your wealth is passed on according to your exact wishes. Below are some of the most strategic trust options worth exploring.

An Irrevocable Life Insurance Trust (ILIT) removes the value of a life insurance policy from your taxable estate, ensuring the payout goes directly to your beneficiaries without increasing your estate tax exposure. This is particularly useful for families using insurance to provide liquidity or pay estate taxes.

A Grantor Retained Annuity Trust (GRAT) is ideal for transferring appreciating assets, like stocks or business interests. It allows you to retain an income stream for a set period, after which the remaining value transfers to your heirs with little or no gift tax liability—especially if the assets grow significantly in value.

Spousal Lifetime Access Trusts (SLATs) allow one spouse to gift assets to a trust that benefits the other spouse (and potentially children), while removing those assets from their estate. SLATs are a flexible way to reduce estate size while maintaining indirect access to the funds.

For those interested in philanthropy, a Charitable Remainder Trust (CRT) can be a win-win. It pays you income for life, then leaves the remainder to a charity. This structure provides both income tax deductions and estate tax reduction, while also supporting causes you care about.

It’s worth noting that these trusts must be created and administered carefully to meet IRS guidelines. That’s where legal counsel comes in—working with an experienced estate planning attorney ensures compliance and maximizes your tax-saving potential.

Strategy #3 | Charitable Giving

Charitable donations aren’t just good deeds—they’re also powerful tax tools. With the right strategy, giving to a qualified charity can reduce your taxable estate, unlock immediate income tax deductions, and help you create a legacy of impact. The key is knowing how to structure your giving for maximum benefit.

One popular approach is a Donor-Advised Fund (DAF)—an option that lets you make a sizable, tax-deductible gift now while deciding later which organizations to support. For families who want flexibility and long-term control, a DAF offers both simplicity and strategic timing.

Another smart tool is a Charitable Lead Trust (CLT), which pays income to a charity for a set number of years before the remaining assets pass to your heirs. This structure not only supports causes you care about but can also significantly reduce—or even eliminate—estate and gift taxes on what’s eventually passed down.

For instance, a Florida business owner who contributes $1 million to a DAF secures an immediate tax deduction and lowers their estate’s taxable value, all while preserving the flexibility to give thoughtfully over time.

Whether you’re donating appreciated stock, real estate, or cash, smart charitable giving lets you align your wealth with your values—and offers returns that go far beyond the financial.

Strategy #4 | Portability and the DSUE

Portability and the DSUE can be a game-changer for married couples navigating estate taxes. This powerful provision lets a surviving spouse inherit any unused federal estate tax exemption from their deceased partner—potentially doubling the amount they can pass on tax-free. But to benefit, the deceased spouse’s estate must file a timely estate tax return to claim the Deceased Spousal Unused Exclusion (DSUE).

Strategy #5 | Family Limited Partnerships (FLPs) and LLCs

Family Limited Partnerships (FLPs) and LLCs offer savvy ways to protect and transfer wealth while reducing tax burdens. These legal structures enable you to pass business or investment assets to your heirs without relinquishing control, all while taking advantage of valuation discounts that can lower gift and estate taxes.

Don’t Forget About Out-of-State Property

Just because you live in Florida doesn’t mean your estate is safe from state-level taxes. While Florida has no estate or inheritance tax, high-net-worth families often own property, investments, or businesses in other states that do—and those assets could trigger unexpected tax bills or complex probate proceedings.

That’s why a thorough, multi-state review of your entire real estate and asset portfolio is critical when building your estate plan. For example, a Florida resident with a summer home in Massachusetts or a commercial property in New York could be exposing their heirs to steep state estate taxes—unless those risks are identified and mitigated in advance.

Estate Tax Planning Checklist for High-Net-Worth Families

✅ Maximize annual tax-free gifting.
✅ Establish trusts that fit your family’s needs.
✅ Use charitable giving to reduce your estate and support causes you value.
✅ Reassess your estate plan regularly (especially after major life or tax law changes).
✅ Work with an estate planning attorney who understands high-net-worth tax strategies.

Ready to Protect Your Legacy and Minimize Estate Taxes?

Your wealth, your family, and your future deserve a plan that works as hard as you do. Let DuFault Law help you create a strategy that preserves generational wealth and reduces tax exposure.

• Call us at (239) 422-6400
• Email us at contact@dufaultlaw.com
• Or Visit our Contact Page to schedule a consultation