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Tax-Efficient Strategies for Affluent Families in 2025

By Michael Nedreski

As we make our way through 2025, affluent families are faced with an evolving tax landscape, with new laws and possible tax hikes on the horizon. However, by staying informed about the latest tax regulations and implementing effective wealth-planning strategies, families can navigate these challenges and position their wealth for future generations.

In this article, I share valuable insights on tax-efficient strategies designed for affluent families, covering topics such as estate planning, tax-advantaged investment options, and charitable giving.

Estate Planning

Let's start with an explanation of estate planning as a fundamental element of tax-efficient wealth transfer.

Essentially, estate planning is how you can distribute wealth to future generations while lowering tax obligations. By strategically structuring your estate, you can leverage a number of tax incentives, including charity deductions and annual gift tax exclusions. This strategy allows you to effectively transfer your assets, reduce potential estate taxes, and assure the continuation of your legacy.

As a professional wealth manager, I've found these estate-planning techniques to be consistently efficient:

• Charitable Planning: Make a lasting impression and simultaneously lower your taxable estate by utilizing charitable giving techniques.
• Family Limited Partnerships (FLPs): Use FLPs to mitigate gift and estate taxes and transfer assets to future generations while maintaining control. (1)
• Gift Tax Exclusions: To transfer wealth to beneficiaries without paying gift tax right away, utilize the annual gift tax exclusions.
• Generational Skipping Transfer Tax: Understand the laws governing the transfer of wealth to grandchildren and beyond. 

Tax-Advantaged Investment Accounts

Another key strategy for reducing your overall tax burden is investing in tax-advantaged accounts. These accounts are specialized savings vehicles that give you tax breaks in exchange for investing your money, allowing your money to grow faster and more efficiently.

Popular tax-advantaged accounts include the following:

• Health Savings Accounts (HSAs): Make tax-deductible contributions and tax-free withdrawals for approved medical costs.  
• 529 Plans: Use 529 plans to save for educational costs while decreasing your tax bill. (2)
• Individual Retirement Accounts (IRAs): Invest in traditional and Roth IRAs to save for retirement and reduce your taxable income. (3)
• Municipal Bonds: Lower your federal income tax obligations by purchasing tax-exempt municipal bonds. (4)

Tax-Efficient Charitable Giving

Lastly, tax-efficient charitable giving allows you to optimize your philanthropic impact while decreasing your tax burden. When you donate appreciated assets like stocks or real estate, you can avoid capital gains taxes and earn a charitable deduction for the full fair market value of the asset. 

Common tax-advantaged charitable giving techniques include:

• Charitable Lead Trusts (CLTs): Give money to a good cause while retaining income for a specified period of time.
• Charitable Deductions: Lower your taxable income by donating cash, appreciated securities, or other assets to approved charities.
• Charitable Remainder Trusts (CRTs): Establish a trust that pays recipients income for a predetermined amount of time, with the remaining funds given to charity. 
• Donor-Advised Funds (DAFs): Create a DAF to gain immediate tax savings while making charitable contributions over time.

Partner With a Professional Tax Advisor

The last suggestion I want to share is that while the 2025 tax-efficient strategies for affluent families discussed above can be a great way to mitigate your tax responsibilities, it's extremely challenging to navigate the complexities on your own. 

Partnering with a professional financial advisor can help to:

• Lessen your tax liability by suggesting tax-efficient strategies.
• Maintain tax law compliance by regularly adjusting your strategy.
• Learn new strategies suited to your unique financial circumstances.

We're Here to Assist

Affluent families face unique challenges, especially with potential changes to tax laws in 2025. The best way to navigate these uncertainties is by working with a qualified financial advisor who can help optimize tax strategies, preserve your wealth, and pursue your long-term financial goals.

At White Oak Wealth Partners, we offer transparent and holistic wealth management tailored to clients at every stage of their financial journey. To us, your wealth is more than the numbers—it's a reflection of your values and aspirations.

To get started, contact us by calling 814-835-4551, emailing MICHAEL.NEDRESKI@LPL.COM, or scheduling an appointment here.

About Michael

Michael Nedreski is managing partner at White Oak Wealth Partners, a specialized financial lifestyle and wealth management firm serving entrepreneurs, business owners, executives, and their families. Mike has 30-plus years of experience in the financial services industry and is committed to serving his clients through holistic financial planning, disciplined investment strategies, and proactive personal service. 

A native of Erie, Pennsylvania, Mike began his career in the financial services industry in 1988. He has earned the Chartered Retirement Planning CounselorSM (CRPC®) designation conferred by College for Financial Planning (188-LPL). Mike is also an active member of the Financial Services Institute (FSI) and Financial Planning Association (FPA).

When not working, Mike enjoys spending time with his wife, Amy, and their children. He volunteers in his community and at his church and his children's schools. An outdoors enthusiast, Mike loves hunting, fishing, golfing, and spending time near or on the water. He also enjoys working out and watching some of his favorite sports teams, the Pittsburgh Pirates and the Cleveland Browns. To learn more about Michael, connect with him on LinkedIn.

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(1) Limited partnerships are subject to special risks, such as potential illiquidity, and may not be suitable for all investors. (140-LPL)

(2) Prior to investing in a 529 plan, investors should consider whether the investor's or designated beneficiary's home state offers any state tax or other state benefits, such as financial aid, scholarship funds, and protection from creditors that are only available for investments in said state's qualified tuition program. Withdrawals used for qualified expenses are federally tax-free. Tax treatment at the state level may vary. Please consult with your tax advisor before investing. (19-LPL)

(3) Contributions to a traditional IRA may be tax-deductible in the contribution year, with current income tax due at withdrawal. Withdrawals prior to age 59 1/2 may result in a 10% IRS penalty tax in addition to current income tax. (157-LPL)

(4) Bonds are subject to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rates rise. Bonds are subject to availability, change in price, call features, and credit risk. (116-LPL)