Estate Planning for Wealthy Families: What You Actually Need at $2M–$20M

The rules changed in 2025. Here's what still matters—and what you can stop worrying about—if your estate is in the $2M–$20M range.

The big change: the estate tax exemption is now $15M, permanently

The One Big Beautiful Bill Act (OBBBA), signed into law in July 2025, permanently raised the federal estate and gift tax exemption to $15 million per person ($30M for married couples with portability). This is not a sunset provision—it's permanent law.

Before OBBBA, the exemption was scheduled to drop from roughly $13.6M back to ~$7M after 2025 under the TCJA sunset. Estate attorneys had been recommending aggressive planning to "lock in" the higher exemption before the cliff. That urgency is now gone for most $2M–$20M families.

If your estate is under $15M ($30M married), you will owe zero federal estate tax under current law. That eliminates the primary argument for complex irrevocable trust structures that were common recommendations just a few years ago.

But "no estate tax" doesn't mean "no estate planning." There are still at least six things wealthy families in this bracket should get right.

1. Beneficiary designations — your most underrated estate document

Retirement accounts (401(k), IRA, Roth IRA), life insurance policies, and annuities pass outside your will via beneficiary designation. If you named your ex-spouse on your IRA in 2009 and never updated it, that's who gets the money—regardless of what your will says, regardless of a divorce decree.

A family with $4M might have $1.5M in IRAs, $800K in a 401(k), and $500K in life insurance—nearly $3M that a will simply cannot control.

Primary + contingent beneficiaries on every retirement account and policy.
Review after every life event: marriage, divorce, death of a named beneficiary, new children or grandchildren.
Consider naming a trust as beneficiary for minor children (so a court-supervised guardian doesn't control the funds).
For large IRAs: understand the 10-year rule for non-spouse beneficiaries under the SECURE 2.0 Act — most non-spouse beneficiaries must fully empty the inherited IRA within 10 years.

2. The four essential documents (that most people skip)

No estate plan is complete without:

Will: Names guardians for minor children, directs assets not governed by beneficiary designation or joint ownership, and names an executor.
Durable power of attorney: Authorizes someone to manage financial affairs if you're incapacitated. Without this, your family may need to petition a court for guardianship—an expensive, public process.
Healthcare proxy / medical power of attorney: Authorizes someone to make medical decisions if you cannot. Different from a financial POA.
Living will / advance directive: Documents your wishes for end-of-life care so your family isn't guessing under duress.

A staggering number of wealthy families have investment accounts, real estate, and business interests but never got these documents done. The will takes a few hours with an estate attorney. The absence of a healthcare proxy can derail a family under the worst possible circumstances.

3. When trusts actually make sense at $2M–$20M

Trusts are tools, not status symbols. Here's when they genuinely add value in this bracket:

Revocable living trust (probate avoidance + privacy)

If you own real estate in multiple states, a revocable living trust avoids probate in each state—saving months and potentially tens of thousands in legal fees. It also keeps your asset distribution private (wills are public court records in most states). Cost: $2,000–$5,000 with a good estate attorney. Ongoing cost: essentially nothing.

Irrevocable life insurance trust (ILIT)

Keeps life insurance death benefits out of your taxable estate. With the $15M exemption, this is less urgent than it was—but if you have $5M of term life insurance and a $12M estate, the combined $17M would still be taxable above the exemption. An ILIT removes the policy proceeds from your estate entirely.

Spendthrift trust for inheritance to children

If a beneficiary has creditor issues, is in a vulnerable marriage, or you simply don't trust them to manage a lump sum at 25, a trust with a trustee and distribution standards is worth the overhead. Particularly relevant for families with $10M+ where an inheritance to a 22-year-old is life-changing in ways that may not be positive.

529 plans (not technically a trust, but worth calling out)

Front-loading a 529 plan with five years of annual gift exclusion ($19,000/year per beneficiary in 2026, so $95,000 at once per donor per beneficiary) is one of the cleanest wealth-transfer moves available. Tax-free growth, no estate inclusion if structured correctly, and education expenses covered.

4. Asset titling — a silent estate-planning mistake

How assets are titled determines what happens to them:

Joint tenancy with right of survivorship (JTWROS): Passes automatically to the co-owner at death—fast, but inflexible. Can cause problems with blended families or if the surviving spouse has creditor issues.
Tenancy in common: Each owner's share passes through their estate, not automatically to the co-owner. Useful when you want control over where each share goes.
Community property (applicable in CA, TX, AZ, NV, WA, ID, NM, WI, AK): Different rules apply. The stepped-up basis on community property applies to the entire asset at the first spouse's death—a significant tax advantage vs. common-law states where only the decedent's half gets stepped up.

Titling issues are easy to create and often discovered only when it's too late to fix them efficiently. If you've moved states, remarried, or inherited property, it's worth a review.

5. The stepped-up basis: your most valuable tax benefit at death

Under IRC § 1014, assets held until death receive a "step-up" in cost basis to fair market value at date of death. This effectively erases embedded capital gains accumulated during your lifetime.

Example: You bought Amazon stock in 2010 for $50,000. It's now worth $800,000. If you sell it, you owe capital gains tax on $750,000 of gain. If you hold it until death, your heirs inherit it at the current $800,000 basis—the $750,000 gain disappears permanently.

Implications for planning:

Highly appreciated stock positions are often better held until death than sold (unless you need the liquidity).
Direct indexing tax-loss harvesting during your lifetime is valuable—but those same positions, if held long enough, would have received a step-up. The tradeoff depends on your life expectancy and tax rate.
Assets in IRAs and 401(k)s do NOT get a step-up. They come out as ordinary income to heirs. This makes Roth conversions—paying tax now so heirs inherit tax-free—especially attractive for accounts you don't plan to spend down.

6. Coordinating your advisor, attorney, and CPA

Estate planning fails when the three professionals don't talk to each other. Your CPA sees the tax return but may not know about the new trust your attorney drafted. Your attorney draws up a trust but doesn't know about the IRA beneficiary designations. Your advisor manages the investments but doesn't know which accounts to fund the trust with.

A fee-only financial advisor in the $2M–$20M bracket typically serves as the coordinator: pulling the estate attorney, CPA, and financial picture together so changes in one domain cascade correctly into the others. That coordination role is where the compounding value lives—not just the investment returns.

Concretely: when the OBBBA passed, a good fee-only advisor proactively reviewed which clients had made large gifts using old trust structures to "lock in" the prior exemption—and recommended unwinding structures that were now unnecessary overhead. That's worth the advisory fee by itself.

What estate planning is NOT worth doing at $2M–$20M (currently)

To be direct about what you can skip under current law:

Dynasty trusts for estate-tax avoidance: Exemption is $15M/person. Unless your estate materially exceeds $30M (married), you don't need aggressive generation-skipping structures to avoid estate tax.
GRATs (grantor retained annuity trusts): Primarily useful when you expect significant asset appreciation to occur and want to transfer that appreciation tax-free. At a 5% IRS hurdle rate and a $15M exemption, the math works less often than it did under the old regime.
Complex FLP/LLC estate-discount strategies: These were used to discount asset values for estate-tax purposes. With a $15M exemption, the tax savings rarely justify the ongoing administrative complexity and audit risk for a $5M or $10M estate.

Quick self-assessment

If you can answer "yes" to all of these, your estate planning basics are covered:

You have a will, durable POA, healthcare proxy, and advance directive—all up to date.
Every retirement account and life insurance policy has current primary and contingent beneficiaries named.
You know how every major asset is titled and why.
If you have minor children: you've named a guardian and thought through how assets would be managed until they're adults.
Your advisor, CPA, and estate attorney have met at least once and have each other's contact information.

Most $2M–$10M families in our network have not done items 2–5. They're not complicated—they just require someone to coordinate them.

Sources: IRC § 1014 (step-up in basis); SECURE 2.0 Act (10-year inherited IRA rule); OBBBA (One Big Beautiful Bill Act, July 2025, permanent $15M estate exemption); IRS Rev. Proc. 2025-67 (2026 annual gift exclusion $19,000).

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