Legal topics
High-net-worth estate planning.
Above the exemption, the work stops being about who gets what and starts being about moving future appreciation out of the estate while you are alive.
Why crossing the threshold changes the work
An estate below the federal exemption faces no federal estate tax, so the planning is about distribution, incapacity, probate avoidance, and family clarity. Once an estate is meaningfully above the exemption, every additional dollar of appreciation inside the estate carries a tax cost at death, and the planning objective shifts.
Two features make this urgent rather than theoretical. First, exemption amounts are set by legislation and have changed substantially and repeatedly. Planning built around a specific number needs revisiting when that number moves. Second, several states levy their own estate or inheritance tax at lower thresholds than the federal one, so an estate that owes nothing federally can still owe at home.
Confirm current exemption and rate figures before relying on any of this. We deliberately do not publish specific numbers on this page because they date faster than the page does.
Freezing and discounting
Two ideas do most of the work in this field.
The core mechanics
- Estate freezing. Transfer an appreciating asset now, so its future growth accrues outside your estate. You use exemption on today's value rather than paying tax on tomorrow's. Techniques in this family include grantor retained annuity trusts and sales to intentionally defective grantor trusts.
- Valuation discounts. A minority interest in a closely held entity, which cannot be sold freely and cannot control distributions, is worth less than a proportionate share of the underlying assets. Transferring such interests can move more economic value for the same taxable amount. Family limited partnerships and LLCs are the usual vehicles.
Discounts are scrutinised
Valuation discounts are examined closely by the IRS, and the case law is extensive and unforgiving where an entity has no genuine business purpose, where the donor retains too much control, or where formalities were not observed. Discounts survive on facts and documentation, which is precisely why the entity underneath has to be real.
The generation-skipping layer
A separate tax applies to transfers that skip a generation, grandchildren and beyond, with its own exemption. Multi-generational planning allocates that exemption deliberately, typically into a long-term trust structured so that assets can benefit successive generations without a transfer tax at each death. Getting the allocation wrong is one of the more expensive mistakes available in this area.
The illiquidity problem
Estate tax is payable in cash, generally within months of death. Estates concentrated in an operating business, real estate, or other illiquid holdings can be asset-rich and cash-poor at exactly the wrong moment, which historically has forced sales at whatever price is available.
Planning for that is a distinct exercise: life insurance held outside the estate, deferral provisions available to closely held businesses, and pre-arranged liquidity. It also overlaps directly with business succession planning because the same illiquid asset is usually the family business.
Where Tresp Corporate Services fits
Nearly every technique above runs through an entity, a family LLC, a limited partnership, a holding company beneath a trust. Those entities are the part we maintain, and they are also the part that determines whether a valuation discount holds up.
What Tresp Corporate Services does here
Structures of this kind are built out of entities, and entities need forming, filing, and maintaining. That part is ours:
Our role
- Form the entities in Wyoming or California
- Act as registered agent in every state where an entity sits
- File the annual reports and keep each entity in good standing
- Maintain the minutes, resolutions, and records that evidence each entity is real and separate
- Provide mail forwarding and public record address service where the structure calls for it
We do not draft estate plans, calculate exemptions, or advise on tax. The design of the structure, and whether it suits you at all, is legal work performed by attorneys, not by us.
For the planning itself, the independent firm Tresp, Day & Associates, Inc. practises in this area.
Information, not advice
This page explains a general legal concept so you can have a better-informed conversation. Tresp Corporate Services, LLC is not a law firm, does not provide legal advice, and forms no attorney-client relationship with you. Nothing here is a recommendation about your circumstances or a prediction about your outcome, nobody can offer either without knowing your facts. For advice on your situation, speak with the independent firm Tresp, Day & Associates, Inc. or counsel of your own choosing.
Have family entities that need to hold up under scrutiny?
We handle formation, registered agent, and compliance. For the legal question, we will point you to the firm.
Common questions
Frequently asked
What makes high-net-worth estate planning different?
Below the federal estate tax exemption, planning is mainly about distribution, incapacity, and probate avoidance. Above it, additional appreciation inside the estate carries a tax cost at death, so the work shifts toward transferring future growth out of the taxable estate during life using the lifetime exemption, valuation discounts, and freeze techniques.
What is an estate freeze?
Transferring an appreciating asset during life so that its future growth accrues outside your taxable estate. You use exemption against today's value instead of paying tax on tomorrow's. Grantor retained annuity trusts and sales to intentionally defective grantor trusts are common examples.
What is a valuation discount?
A minority interest in a closely held entity that cannot be freely sold and cannot control distributions is worth less than a proportionate share of the underlying assets. Transferring such interests can move more economic value for the same taxable amount. Discounts are closely scrutinised and depend on the entity having genuine substance and observed formalities.
Why does illiquidity matter in estate planning?
Estate tax is generally payable in cash within months of death. An estate concentrated in a business or real estate can be asset-rich and cash-poor, historically forcing sales at unfavourable prices. Planning for liquidity is a separate exercise from planning for transfer.
Tresp Corporate Services, LLC provides corporate, registered-agent, and compliance services and does not provide legal advice. For legal matters, we work in tandem with the independent law firm Tresp, Day & Associates, Inc. This page is general information only.
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