Legacy 2025: Smart Strategies for Wealth Preservation and Succession

By: Randall A. Denha, J.D., LL.M.

As we begin 2025, now is the time to take control of your financial future. The start of the new year presents unique opportunities to protect your wealth, ensure your legacy, and prepare for the years ahead. Whether you’re building wealth, managing a business, or planning for family transitions, these eight key strategies will help guide your efforts to secure your financial success in the year ahead.

1. Maximize Estate Tax Benefits Before They Expire

The current federal gift, estate, and generation-skipping transfer tax exemption stands at $13.99 million per individual, but this generous threshold is set to drop to roughly $7 million on January 1, 2026—unless Congress acts. This presents a unique opportunity to transfer significant wealth tax-free before the exemption is reduced.

By acting now, you can gift large sums to loved ones, reduce your taxable estate, and lock in the higher exemption rate. For high-net-worth families, this window is already closing, and many are gifting the maximum amount allowed while they can. Take advantage of the current tax rules while they last, as the IRS has confirmed that there will be no “clawback” on exemptions used before the reduction.

2. Give More with Increased Annual Exclusions

In 2025, the annual gift tax exclusion will increase to $19,000 per recipient, and for married couples, this rises to $38,000. This new limit allows you to transfer more wealth to your loved ones tax-free, reducing your estate and leaving a lasting impact on future generations.

For example, imagine gifting $38,000 each to ten grandchildren—that’s $380,000 transferred tax-free in just one year. These annual gifts not only help you reduce your taxable estate but also have the potential to grow outside of it. When you factor in compounded growth, these gifts can generate substantial future value. This is a simple but powerful tool for wealth transfer, so be sure to utilize it.

3. Prepare for Corporate Transparency Act Compliance

If you own a business, the Corporate Transparency Act (CTA) may impact your operations. While the CTA’s reporting requirements for entities created before 2024 have been temporarily paused, business owners should begin preparing for future compliance. The deadline for reporting is expected to resume after February 2025.

This is the perfect time to consult with your legal and tax advisors to review your obligations. Understanding your reporting requirements now will help you avoid penalties and ensure compliance down the road. Waiting until the deadline looms could lead to costly delays and complications, so proactive planning is key.

4. Prioritize Business Succession Planning

A successful business is built on solid planning. If you own a family business or closely held company, 2025 is an excellent time to revisit your business succession plan. A strong succession plan ensures a smooth transfer of ownership and leadership, reduces the risk of family disputes, and ensures the continuity of operations after your exit.

Consider these questions: Is your successor prepared to take the helm? Have you clearly outlined your ownership structure? Have you taken steps to ensure business operations continue seamlessly? A well-crafted succession plan should not only address the financial and operational aspects of your business but also account for family dynamics and long-term goals.

With the right plan in place, you can avoid probate delays and guarantee that your company transitions smoothly to the next generation or new ownership.

5. Reevaluate Your Succession Plan After the Connelly Decision

The Supreme Court’s recent ruling in Connelly v. United States has significant implications for business owners. The decision mandates that life insurance proceeds used for stock redemption obligations must now be included in the business’s estate tax valuation. This ruling could lead to a higher estate tax burden than you originally anticipated.

In light of this decision, it’s essential to review how life insurance fits into your business succession planning. Are your policies structured in a way that minimizes estate taxes? Work with your advisors to ensure your life insurance strategies are optimized, reducing taxes while preserving the financial benefits you’ve built. Revisiting this area of your planning now will ensure you’re prepared for any changes in estate tax regulations.

6. Review Your Insurance Policies for Cost Savings and Long-Term Coverage

As part of your overall 2025 action plan, don’t overlook the importance of insurance. Insurance serves as a critical tool in wealth preservation and risk management, and with ongoing changes in premiums and coverage options, it’s a great time to evaluate your current policies.

Review your life, health, property, and business insurance policies to identify opportunities for savings without compromising coverage. A comprehensive insurance review can highlight areas where you may be overpaying or underinsured, providing the opportunity to secure long-term protection at more affordable rates. Consulting with an insurance professional can ensure you are fully covered for any eventuality, from unforeseen life events to business risks.

7. Estate Planning for Digital Assets and Cryptocurrencies

As digital assets, including cryptocurrencies and online accounts, continue to grow in popularity, it’s important to include these assets in your estate plan. These assets may require special consideration to ensure they are properly transferred and managed after your death.

Take time to inventory all of your digital assets and make sure you have clear instructions for your beneficiaries on how to access them. Consider working with an estate planning attorney who is familiar with digital asset laws and can ensure your online assets are included in your will or trust.

8. Establish a Charitable Giving Plan to Reduce Taxes and Support Causes You Care About

Philanthropy plays a significant role in many estate and wealth strategies. Charitable giving can reduce your taxable estate while benefiting causes that are close to your heart. In 2025, consider formalizing your charitable giving plan, whether through a donor-advised fund, charitable remainder trust, or direct gifts to your chosen charities. By strategically donating, you can lower your estate taxes while leaving a meaningful legacy to the causes you support. This also provides an opportunity to involve younger generations in your philanthropic endeavors, teaching them about the importance of giving back.