Private Wealth Staying current with estate plans and investment strategies will help make 2025 a success. The estate tax exemption — currently $13.6 million per individual and double that for couples — will be halved starting on January 1, 2026, which has dominated discussions between high-net-worth individuals and their advisors for the past two years. One way to avoid tax headaches is through trusts such as irrevocable life insurance trusts (ILITs) and spousal lifetime asset trusts (SLATs). Although the grantor of such trusts will lose control of the assets, the wealth is shielded For other investors, alternative investments include from taxation for the benefit of loved ones or favored “buffered” ETFs that cap gains but limit losses; and a philanthropic organizations. covered call strategy that involves equity investments that produce income while still generating capped equity gains A downside to such a strategy is that individuals will and a floor for losses. Investment companies have noticed need to have their assets appraised and the trusts set the trend and are offering mutual funds that mimic a up in 2025. Not only will it be difÏcult to find last-minute covered call strategy. resources to handle the paperwork and legal issues involved in starting a trust, but there’s also concerns that there will be long waiting periods for appraisals, especially 12. S&P Global, “U.S. Equities Market Attributes October 2024,” toward the end of the year. November 5, 2024. 13. J.P. Morgan, “A tale of two markets: Divergence amid the post– For investors, things may become more stable after several Labor Day sell-off,” September 6, 2024. years of uncertainty. Through October 2024, year-to-date 12 returns for the S&P 500 stood at 19.62%, though bond yields are low and will likely fall further with interest rate 13 reductions from the Federal Reserve. For many investors, the current environment may probably favor traditional portfolios of 60% stocks and 40% bonds, achieving diversification based on the negative correlation between stocks and bond returns. But increasing numbers of high-net-worth individuals are also investing in alternative vehicles such as private credit, venture capital and private equity. 66