UHNW Estate Planning: Trust Strategies for $30M+ Families

Not tax or legal advice. Verify all figures and strategies with qualified estate counsel before acting.

Estate planning at $30M+ is not just bigger-ticket version of what the $3M estate planning playbook covers. The tools are different, the stakes are different, and the margin for error is different. A family that uses the wrong trust structure — or uses the right structure too late — can leave $5–20M on the table in unnecessary estate tax or lose transfer opportunities that were only available at a specific life moment.

This guide covers the trust vehicles, tax numbers, and sequencing decisions that matter at the $30M–$200M level.

The $15M exemption: what OBBBA changed

Before July 2025, a major estate planning risk for UHNW families was the scheduled sunset of the TCJA doubled exemption — which would have reverted from ~$14M back to ~$7M per person in January 2026. The One Big Beautiful Bill Act (OBBBA, July 2025) permanently eliminated that cliff.¹

For 2026, the federal estate and gift tax exemption is $15,000,000 per individual, indexed for inflation after 2026. A married couple can shield $30,000,000 from federal transfer tax using portability or credit shelter trust planning. The GST (generation-skipping transfer) exemption is identical: $15M per person.

The 40% federal estate tax still applies to amounts above the exemption. On a $50M estate with $30M sheltered by exemptions, $20M of excess is taxed at 40% — an $8M bill paid before heirs receive anything.

Trust vehicles: the $30M+ toolkit

There is no single best trust for UHNW families. Most comprehensive estate plans use two to four of these structures in combination, timed around wealth events. Here is how each one works and when it applies.

Grantor Retained Annuity Trust (GRAT)

A GRAT is an irrevocable trust to which you transfer assets, then take back an annuity stream for a fixed term (typically 2–10 years). At the end of the term, any remaining assets pass to heirs — gift-tax-free to the extent the assets outperformed the IRS "hurdle rate" (the § 7520 rate, published monthly).²

How the math works: Suppose you fund a 3-year GRAT with $5M in private equity fund interests when the § 7520 rate is 5%. The IRS computes the "remainder" value (what heirs receive) by subtracting the present value of the annuity payments from the contributed amount. If you structure the annuity to equal the full present value of your contribution, the "taxable gift" at funding is approximately zero — called a "zeroed-out GRAT." If the assets then return 15% over the term, the excess appreciation (~$1.5M in this example) passes to heirs with no gift tax.

The rolling GRAT strategy: Because a GRAT that underperforms fails (heirs get nothing, but you also pay no gift tax), the optimal approach is a sequence of short-duration GRATs — commonly 2-year terms — funded with assets you expect to appreciate significantly. Each GRAT is a low-risk bet: if it fails, you try again. If it succeeds, the appreciation is permanently removed from your estate.

Best assets for a GRAT:

• Pre-IPO company stock or founder shares expected to appreciate sharply
• Private fund interests still early in the J-curve
• Publicly traded stock with short-term catalyst (earnings, acquisition) — though § 2702 restrictions apply
• Real estate with known development upside

Limitation: If you die during the GRAT term, the assets revert to your estate. This is why short-duration (2-year) GRATs are preferred for older grantors — limiting mortality risk to the term.

Spousal Lifetime Access Trust (SLAT)

A SLAT is an irrevocable trust you fund with a gift — up to your $15M lifetime exemption — for the benefit of your spouse and descendants. The assets leave your taxable estate, but your spouse retains access to the trust assets during their lifetime.³

The strategic value: A SLAT lets you "use up" your exemption now, while retaining indirect access to the gifted wealth through your spouse. Because you're using the exemption now, all future appreciation on the gifted assets (dividends, capital gains, market growth) occurs outside your taxable estate.

Example: A 55-year-old founder transfers $15M into a SLAT after a liquidity event. Over 30 years at a 6% net return, that $15M grows to $86M. At death, none of that $86M is in the taxable estate. If instead it stayed in the estate at the same return, the federal estate tax on $86M at 40% (above exemptions already used) would be over $34M.

Critical constraints:

• Reciprocal trust doctrine: If both spouses create near-identical SLATs for each other at the same time, the IRS may "uncross" them and treat both as if they stayed in the grantors' estates. SLATs must differ materially in trustee, asset type, terms, or timing.
• Divorce risk: If the marriage ends, the trust still runs. Your ex-spouse remains a beneficiary. Asset protection planning (trust protector language) is important.
• Loss of step-up: Assets transferred to an irrevocable trust generally do not receive a basis step-up at the grantor's death (unlike assets held outright). Highly appreciated low-basis assets may be better candidates for holding until death than for gifting into trust.

Intentionally Defective Grantor Trust (IDGT)

An IDGT is structured to be outside the grantor's estate for estate tax purposes but treated as the grantor's property for income tax purposes — intentionally "defective" under the grantor trust rules (IRC §§ 671–677).⁴ This creates a powerful planning opportunity: the grantor pays income taxes on trust earnings, which effectively makes a tax-free gift to the trust equal to the taxes paid.

The installment sale: The most common IDGT technique is the sale of appreciated assets to the trust in exchange for a promissory note at the applicable federal rate (AFR). Because grantor and trust are the same taxpayer for income tax purposes, there is no capital gain recognized on the sale — only gift tax on any initial seed gift (typically 10% of the sale price). This allows transfer of $10M–$50M of appreciated assets with no immediate income tax and minimal gift tax.

When it's most powerful:

• When the assets being transferred have high expected appreciation (business interests, real estate, concentrated equity)
• When AFRs are low relative to expected asset returns (the spread is the transfer)
• When the grantor has ongoing earned income to cover trust income tax obligations

Dynasty Trust — multi-generational GST planning

A dynasty trust is funded with GST-exempt transfers (using your $15M GST exemption) and structured to last as long as state law permits — which in South Dakota, Nevada, and Delaware is perpetuity.⁵

Why perpetuity matters: Every generation that inherits trust assets outside of the dynasty structure pays estate tax at death (40% above their exemption). Inside a dynasty trust, assets pass from generation to generation with no estate tax event at each generation's death — because the trust never terminates. A dynasty trust funded with $10M in 2026, compounding at 7% annually for three generations (~90 years), contains over $600M — all of it outside the transfer tax system.

Jurisdiction matters: States like South Dakota (no Rule Against Perpetuities, strong spendthrift protections, directed trust statute) and Nevada are preferred. You do not need to live there — your trust can be governed by SD law with a South Dakota trust company as directed trustee.

Practical note: You don't need $15M to make a dynasty trust worth it. A $2–5M seed contribution of assets expected to appreciate substantially (early-stage equity, real estate) can be compelling. The goal is to get GST-exempt dollars into the trust and let them compound outside the estate system.

Irrevocable Life Insurance Trust (ILIT)

Life insurance death benefits are income-tax-free under IRC § 101(a). But if you own the policy, the death benefit is included in your taxable estate. An ILIT owns the policy — removing the death benefit from your estate entirely.⁶

At $30M+, the use case shifts: ILITs are less about "covering estate taxes because we can't afford them" (at $15M exemption, liquidity risk is lower) and more about:

• Estate equalization: One child inherits the operating business; others receive life insurance proceeds through the ILIT.
• Leveraged estate freeze: Premium dollars (annual gifts to the ILIT) buy a death benefit that arrives outside the estate at multiples of the premium. At favorable underwriting, this is among the highest-leverage transfer mechanisms available.
• Second-to-die policies: Commonly used to provide liquidity for estate tax on the second spouse's death — the policy pays out just as the bill arrives.

The trust tax compression trap

Irrevocable non-grantor trusts — trusts where the grantor is not treated as owner for income tax purposes — face severely compressed income tax brackets. In 2026, a trust hits the 37% federal rate at just $16,000 of retained taxable income, compared to over $640,000 for an individual filer.⁷ Capital gains hit the 20% rate at $16,250 inside a trust vs. $583,750+ for an individual (married).

The implication: Trusts that accumulate income instead of distributing it are extremely tax-inefficient. The standard approach is to distribute trust income to beneficiaries — who pay tax at their personal rates — via the trust's distribution deduction (Form 1041 Schedule B). Beneficiaries almost always face lower marginal rates than the trust brackets, making distribution preferable from a pure income tax standpoint.

What this means for trust design: Non-grantor trusts should be designed with distribution flexibility — typically a fully discretionary distribution standard — so the trustee can push income out to beneficiaries in high-income years and retain it (sparingly) when a beneficiary has a lower-income year.

Grantor trusts (GRATs, IDGTs, SLATs during the grantor's lifetime) sidestep this issue entirely: the grantor pays all income taxes on trust earnings at personal rates, which is effectively a tax-free gift to the trust.

Annual gifting strategies

The $15M lifetime exemption is separate from the annual gift exclusion. In 2026, you can give any individual up to $19,000 per year ($38,000 per couple using gift splitting) with no gift tax and no reduction in your lifetime exemption.⁸

At $30M+ of wealth, a disciplined annual gifting program adds up:

• Two spouses × $19,000 × 4 children = $152,000/year removed from the estate, tax-free
• Add spouses of those children: × $19,000 × 4 = $152,000 more
• Add grandchildren, trusts for minors: $19,000 per beneficiary
• Over 20 years at scale: $1–3M+ removed from the estate with zero gift tax filings

529 superfunding: The 5-year election allows a lump-sum gift of $95,000 per beneficiary ($190,000 per couple) to a 529 in one year, treated as if made over 5 years for annual exclusion purposes. At $30M+ with multiple grandchildren, 529 superfunding is a routine annual gifting tool.

Direct medical and tuition payments: Payments made directly to medical providers and educational institutions — not to individuals — are fully excluded from gift tax with no dollar limit under IRC § 2503(e). This is distinct from the $19,000 annual exclusion and doesn't reduce it.

Sequencing: which moves to make first

The right sequence depends on your wealth level, age, health, asset composition, and the liquidity events you can anticipate. As a starting framework:

1. Protect the most appreciating assets first. GRAT or SLAT with private equity interests, pre-IPO stock, or real estate with 5–10 year upside. These assets need to be outside the estate before the appreciation occurs, not after.
2. Use exemption on liquid assets next. Post-liquidity-event cash or diversified equities can fund a SLAT to use the exemption while also providing spousal access flexibility.
3. Seed a dynasty trust with GST-exempt dollars. Even $2–5M seeded into a dynasty trust in a favorable jurisdiction begins the multi-generational compounding clock outside the estate system.
4. Annual gifting ongoing. Systematic annual exclusion gifts, 529 superfunding, and direct tuition/medical payments compound over decades. Start in year one, not year ten.
5. Review the estate plan every 3 years. OBBBA changed the exemption amount; the next administration may change it again. Regulatory shifts, family changes (births, deaths, divorces), and asset changes (new liquidity events, private fund distributions) all require plan updates.

Who manages this — and why it matters

UHNW estate planning requires a team: an estate planning attorney to draft the trust documents, a CPA for annual trust tax filings and gift tax returns, and a financial advisor to coordinate the investment, insurance, and gifting strategy.

The coordination failure is the single largest source of expensive mistakes. An estate attorney drafts an IDGT with a promissory note at the correct AFR — but the financial advisor parks the trust assets in a money market because nobody specified investment instructions. The trust earns 5%; the AFR is 4.5%; the spread to heirs is 0.5% instead of the expected 12% return on private equity. The structure worked; the implementation failed.

Fee-only RIAs with UHNW experience act as the coordination point — they don't draft the trust documents, but they know what questions to ask the attorney, what assets to fund into which vehicles, and how to keep the investment strategy aligned with the estate plan objectives. This is a different skill set from portfolio management, and most generalist advisors don't have it.

Sources

1. IRS — 2026 inflation adjustments including OBBBA: estate/gift/GST exemption $15,000,000 per individual. Annual gift exclusion $19,000 per recipient. Values verified April 2026.
2. IRC § 7520 — Valuation tables; interest rate used for valuing annuities, life estates, remainders (the "7520 rate" or GRAT hurdle rate). Published monthly by IRS.
3. IRC § 2036 — Transfers with retained life estate; IRS position on SLAT estate inclusion if reciprocal trust doctrine applies.
4. IRC §§ 671–677 — Grantor trust rules; when and why a trust is taxed to the grantor rather than to the trust as a separate entity.
5. South Dakota Trust Code — Title 55; no Rule Against Perpetuities for dynasty trusts, directed trust statute, strong spendthrift protection.
6. IRC § 101(a) — Income tax exclusion for life insurance death benefits. § 2042 — Estate inclusion when the decedent held incidents of ownership.
7. Tax Foundation — 2026 federal tax brackets: trust and estate 37% bracket begins at $16,000 of taxable income; individual 37% bracket begins at $643,750+ (MFJ). Values per IRS Rev. Proc. 2025-x (2026 inflation adjustments).
8. IRS — 2026 annual gift tax exclusion: $19,000 per recipient ($38,000 per couple with gift splitting). 529 superfunding: 5-year election allows $95,000 per beneficiary ($190,000 per couple). § 2503(e) direct medical and tuition exclusion: unlimited, separate from annual exclusion.

Tax law and regulatory guidance change frequently. Verify all figures for the current tax year with qualified estate counsel before acting. OBBBA implementing regulations were still being issued as of April 2026; consult IRS guidance for final rules on affected provisions.