U.S. Tax Attorney
Ready to Structure Your Legacy?
The federal estate, gift, and generation-skipping transfer tax system is complex, evolving, and filled with both opportunities and pitfalls. From foundational principles like lifetime aggregation and the Applicable Exclusion Amount, to advanced strategies involving GRATs, ILITs, valuation discounts, and multigenerational planning, every decision carries long-term implications for your wealth and legacy. The impending 2026 sunset on the current high exclusion underscores the urgency of proactive planning—delaying action could result in significantly higher transfer taxes and reduced flexibility for future generations.
Navigating this intricate landscape requires specialized knowledge, careful strategy, and personalized guidance. I work closely with clients to design comprehensive wealth transfer plans that preserve assets, minimize transfer taxes, and ensure that your estate aligns with both your financial objectives and your family’s long-term goals.
Take the first step toward securing your legacy today. Contact our firm for a confidential consultation, and let us help you create a thoughtful, tax-efficient strategy that protects your wealth and provides peace of mind for generations to come.
The Unified Tax Rate & Lifetime Aggregation
At the heart of the United States federal wealth transfer system lies a single, integrated framework: the Unified Transfer Tax. Unlike income taxes, which assess earnings as they arise, this system focuses on the cumulative transfer of wealth, whether during life or at death. The concept of lifetime aggregation is central to this framework. Under this approach, every taxable gift made while living is combined with the transfers that occur at death to determine the total tax exposure of an individual. This aggregation ensures that taxpayers cannot avoid estate tax liability by shifting wealth early in life without regard to cumulative limits.
The unified rate structure is progressive, meaning that the tax rate increases as the total value of taxable transfers rises. Statutory guidance for this rate schedule is set forth in IRC §2001 for transfers at death and IRC §2501 for lifetime gifts. For practical purposes, this unified schedule ensures that lifetime gifts are effectively counted against the ultimate estate tax liability, allowing taxpayers to plan strategically to utilize available exclusions and avoid unnecessary taxation.
Importantly, the unified system embodies the principle that wealth transfers are not isolated events but components of a single continuum. Each gift made during life reduces the portion of wealth that can pass tax-free at death through the applicable exclusion amount. This mechanism highlights the significance of careful planning: by monitoring cumulative transfers, individuals can make informed decisions about inter vivos gifts, trust funding, and other wealth transfer strategies, ensuring that the maximum amount of their estate passes to beneficiaries with minimal tax impact.
By understanding the unified tax rate and the principle of lifetime aggregation, clients gain insight into how each financial decision—whether a gift today or a transfer at death—fits into a broader tax strategy. This foundational knowledge serves as the starting point for all effective estate, gift, and generation-skipping transfer planning, emphasizing both the opportunities and the constraints inherent in the federal tax code.
Navigating the complexities of federal estate, gift, and generation-skipping transfer taxation requires not only technical knowledge of the Internal Revenue Code but also strategic foresight tailored to each client’s unique circumstances. My practice is dedicated to providing comprehensive legal guidance to individuals, families, and closely held businesses seeking to preserve wealth, minimize transfer taxes, and ensure that assets pass seamlessly to intended beneficiaries.
I advise clients on all aspects of wealth transfer planning, including the design and implementation of sophisticated estate plans that integrate lifetime gifting strategies, trusts, and multigenerational wealth preservation structures. This includes specialized planning using Grantor Retained Annuity Trusts (GRATs), Irrevocable Life Insurance Trusts (ILITs), and family entities, as well as the careful allocation of gift, estate, and generation-skipping exemptions to optimize tax efficiency.
In addition to forward-looking planning, I represent clients in navigating the procedural and compliance requirements imposed by the IRS, including preparing and reviewing estate and gift tax returns (Forms 706 and 709), timely claiming of applicable exclusions, and ensuring proper elections – such as portability of the Deceased Spousal Unused Exclusion – are made to preserve tax benefits.
For clients facing complex or high-value transfers, I provide strategic guidance to minimize exposure under Chapter 14 and other anti-abuse provisions, ensuring that retained powers or valuation techniques do not inadvertently trigger additional taxes. My services also extend to dispute resolution, offering representation in audits or challenges related to estate, gift, or GST taxation.
Ultimately, my practice is focused on providing clarity and confidence. By combining in-depth knowledge of federal tax law with practical, personalized strategies, I help clients structure their wealth transfers in a manner that protects their legacy, achieves tax efficiency, and aligns with their long-term family and financial goals.
Strategic Tax Advisory
The Unified Transfer Tax Framework
The foundation of federal estate and gift tax planning rests on understanding the Unified Transfer Tax system. This system, codified in Subtitle B of the Internal Revenue Code, creates a cohesive framework for taxing wealth transfers, whether they occur during life or at death. By integrating lifetime gifts and transfers at death under a single, progressive tax regime, the law ensures that all taxable transfers are accounted for and taxed consistently. Understanding this framework is essential for effective wealth preservation and tax-efficient planning.
The Unified Tax Rate & Lifetime Aggregation. At the core of this framework is the principle of lifetime aggregation. Under the federal system, every taxable transfer made during life—such as a gift to a child, grandchild, or trust—is combined with the transfers that occur at death to determine the total tax liability of an individual. This ensures that taxpayers cannot avoid estate tax simply by making lifetime gifts, as all transfers are measured against the same cumulative limits. Statutory guidance for this aggregation is provided in IRC §2001, which governs transfers at death, and IRC §2501, which governs lifetime gifts.
The tax rates themselves are progressive, meaning that higher cumulative transfers are subject to higher tax rates. This design emphasizes fairness and recognizes the varying capacity of individuals to transfer wealth. For clients, this principle underscores the importance of careful planning: by understanding the total lifetime transfers, individuals can strategically use their exclusions and deductions to minimize tax exposure and preserve family wealth for future generations.
The Applicable Exclusion Amount (AEA) & The 2026 Sunset. The single most powerful tool in federal transfer tax planning is the Applicable Exclusion Amount (AEA), also known as the Basic Exclusion Amount (BEA). The AEA functions as a cumulative shield, allowing individuals to transfer a significant portion of their wealth tax-free over their lifetime and at death. For example, under current law, a high AEA enables individuals to make substantial gifts during life without incurring gift tax, while preserving the ability to pass additional wealth at death free from estate tax.
However, the current high exemption is temporary. As part of the Tax Cuts and Jobs Act of 2017 (TCJA), the AEA was significantly increased, but the statute includes a “sunset provision” mandating that, effective January 1, 2026, the exemption will revert to pre-2018 levels. This scheduled reduction represents a dramatic contraction in tax-free transfer capacity, highlighting the urgency for proactive planning. Understanding the magnitude of this change is critical: without careful structuring, clients could face substantially higher transfer taxes if the sunset provision is not anticipated in advance.
Portability of Exclusion. A further planning consideration is the portability of the unused exclusion between spouses. Known as the Deceased Spousal Unused Exclusion (DSUE), this provision allows a surviving spouse to utilize any portion of their deceased spouse’s unused AEA. However, portability is not automatic—it requires a timely filed Form 706 to elect the unused exclusion. This procedural nuance presents both an opportunity and a risk: when leveraged correctly, married couples can maximize their combined exclusion, effectively doubling the amount of wealth that can be transferred free of tax. Conversely, failure to make the election can result in lost tax-saving potential.
Portability, combined with lifetime aggregation and the AEA, forms the cornerstone of strategic estate and gift tax planning. It allows for the coordination of lifetime gifts, trust funding, and post-mortem planning to optimize tax outcomes. By mastering these foundational principles, clients gain a framework for all subsequent planning decisions, ensuring that wealth is preserved, transferred efficiently, and protected from unnecessary taxation.
Understanding the foundational principles of the Unified Transfer Tax—lifetime aggregation, the Applicable Exclusion Amount, and portability—is critical, but translating that knowledge into a practical, personalized plan requires expert guidance. My services are designed to help clients navigate these core rules while maximizing their wealth preservation opportunities.
I assist individuals and families in analyzing their cumulative lifetime gifts and projected estate transfers to ensure that all transfers are efficiently coordinated with the applicable exclusion amount. This includes evaluating the timing, size, and type of gifts to leverage both current law and the anticipated changes under the 2026 sunset provision. By forecasting the impact of the reversion to pre-2018 exemption levels, I help clients structure transfers in a way that minimizes tax exposure and preserves maximum wealth for future generations.
For married couples, I provide detailed guidance on portability of the Deceased Spousal Unused Exclusion (DSUE). I ensure that elections are timely made, Form 706 is properly completed, and planning opportunities for combined exclusion utilization are fully realized. This proactive approach helps prevent the loss of valuable tax benefits and enables couples to coordinate lifetime gifts and estate transfers efficiently.
By combining a deep understanding of the unified transfer tax framework with tailored planning strategies, my services empower clients to make informed decisions about inter vivos transfers, trust funding, and post-mortem estate planning. The result is a structured, compliant, and tax-efficient approach to wealth transfer that aligns with both immediate financial goals and long-term legacy objectives.
My Services
Core Mechanisms – Gift Tax & Estate Tax
Once the foundational principles of the unified transfer tax are understood, clients can begin to explore the mechanics of the two primary taxable events: gifts made during life and transfers occurring at death. Each of these events is governed by distinct rules, exclusions, and planning strategies, yet both are interconnected through the unified tax framework and cumulative lifetime aggregation. Understanding these mechanisms is essential to minimizing tax liability and preserving wealth for intended beneficiaries.
A. The Federal Gift Tax: Lifetime Planning. The federal gift tax, codified in Chapter 12 of the Internal Revenue Code, is designed to capture the transfer of wealth during a donor’s lifetime that exceeds certain thresholds. Its primary purpose is to prevent individuals from circumventing estate taxes by shifting significant assets before death. For clients, the gift tax represents both a challenge and an opportunity: while transfers may trigger tax liability, carefully structured gifts can maximize tax-free transfers and enhance multigenerational wealth planning.
A key tool for tax-efficient lifetime gifting is the annual exclusion, which allows donors to transfer a specific amount to each recipient each year without incurring gift tax or reducing the Applicable Exclusion Amount (AEA). For example, in 2024, this exclusion is $18,000 per donee, with the potential for married couples to split gifts, effectively doubling the annual exclusion per recipient pursuant to IRC §§2503(b) and 2513. Strategic use of this provision allows families to transfer meaningful wealth over time while minimizing immediate tax consequences.
A more nuanced consideration arises when gifts are made to trusts. The law requires that a gift be a present interest to qualify for the annual exclusion, which can be complicated when transferring assets into trusts that restrict beneficiary access. Here, the innovation of Crummey Powers becomes invaluable. By giving beneficiaries the temporary right to withdraw contributions, planners can structure trust gifts that satisfy the present interest requirement, ensuring they qualify for the annual exclusion. This approach has been reinforced through key authorities, including Helvering v. Hutchings and Crummey v. Commissioner, making it a standard tool in sophisticated estate planning.
Additionally, certain transfers are exempt from gift tax entirely. Under IRC §2503(e), direct payments for tuition or medical care can be made without reducing the annual exclusion or the AEA. These provisions allow families to support education and healthcare needs while preserving valuable transfer tax capacity for other assets.
B. The Federal Estate Tax: Post-Mortem Strategy. While lifetime gifting offers proactive opportunities, the federal estate tax—governed by Chapter 11 of the IRC—determines the ultimate tax burden at death. The starting point in calculating estate tax is the Gross Estate, which includes all property interests held by the decedent at death, even those over which they retained control, such as certain retained annuities or powers over trusts (IRC §§2036 and 2038). From this comprehensive base, allowable deductions are subtracted to arrive at the Taxable Estate, which forms the foundation for calculating the estate tax due.
Two of the most powerful tools for reducing estate tax are the unlimited marital and charitable deductions. Assets passing to a surviving spouse under IRC §2056, or to a qualified charitable organization under IRC §2055, can generally pass free of estate tax. Revenue Procedure 64-19 and related authorities provide guidance on structuring these transfers to ensure compliance while maximizing tax savings. By leveraging these deductions, clients can dramatically reduce estate tax liability, preserve family wealth, and fulfill philanthropic objectives.
Effective planning often requires coordination between lifetime gifts and post-mortem strategies. By understanding the interplay between gift tax exclusions, trust structures, and estate tax deductions, clients can structure a seamless transfer strategy that minimizes tax exposure, supports family goals, and maintains flexibility in responding to future financial or personal developments.
Navigating the intricacies of the federal gift and estate tax requires both technical expertise and strategic foresight. My services are designed to help clients leverage the rules governing lifetime gifts and post-mortem transfers to achieve tax-efficient wealth preservation.
For lifetime planning, I guide clients in structuring gifts that maximize the annual exclusion and, where applicable, employ gift splitting to increase tax-free transfers. I provide detailed counsel on trust-based gifting, including the implementation of Crummey Powers and other mechanisms to ensure contributions qualify as present interest gifts, thereby fully utilizing available exclusions. Additionally, I advise on direct payments for tuition and medical expenses, helping clients support their families while conserving their transfer tax capacity.
On the estate side, I assist in calculating the Gross Estate and Taxable Estate, identifying opportunities to reduce estate tax through the unlimited marital and charitable deductions. I also coordinate lifetime and post-mortem strategies, ensuring that gifts, trusts, and deductions are harmonized to minimize tax exposure and preserve family wealth for future generations.
Through comprehensive planning, compliance review, and strategic coordination of transfers, my services empower clients to navigate both the gift and estate tax landscape with confidence, turning complex rules into actionable solutions that align with personal and financial objectives.
My Services
The Generation-Skipping Transfer (GST) Tax
While estate and gift taxes address transfers to immediate heirs, the federal Generation-Skipping Transfer (GST) Taxensures that tax is also applied to transfers that skip a generation. This separate tax exists to prevent taxpayers from circumventing transfer taxes by passing substantial wealth directly to grandchildren or more remote descendants, thereby avoiding taxation at the intermediate generational level. The GST Tax operates in addition to estate and gift taxes and is imposed at a flat rate equal to the highest estate tax rate, emphasizing its role as a critical consideration for multigenerational planning.
The Separate Tax on Multigenerational Wealth. The primary purpose of the GST Tax, codified in Chapter 13 of the Internal Revenue Code, is to maintain fairness in the federal transfer tax system by capturing wealth that would otherwise escape taxation through generational skipping. By targeting transfers to “skip persons”—generally individuals who are two or more generations below the donor—the law ensures that the cumulative transfer of wealth remains subject to taxation, preserving the intended fiscal base of the unified transfer tax system. For families with substantial wealth, the GST Tax is often the defining factor in structuring trusts and intergenerational gifts, requiring careful planning to avoid unintended tax liability.
The Non-Portable Exemption. Unlike the estate and gift tax exclusions, the GST Exemption is not portable between spouses. Each individual has a lifetime GST Exemption that must be affirmatively allocated either during life or at death by the executor. Failure to make this allocation can result in transfers being fully exposed to the flat GST Tax, potentially creating significant and unexpected tax liability for beneficiaries. For planners, this distinction highlights the importance of proactive decision-making: careful allocation of the GST Exemption is essential to maximizing multigenerational wealth transfer while minimizing tax exposure.
Taxable Transfers. The GST Tax applies to three specific categories of transfers. First, Direct Skips occur when wealth is transferred outright to a skip person, such as a grandchild, without the involvement of an intervening trust or estate. Second, Taxable Terminations happen when a trust interest held by non-skip persons ends, and the remaining assets pass to skip persons. Third, Taxable Distributions arise when income or principal from a trust is distributed to skip persons prior to the termination of the trust. Each of these events triggers GST Tax liability unless properly managed through exemption allocation or trust design.
By integrating an understanding of skip persons, taxable events, and exemption allocation into estate planning, clients can preserve wealth across multiple generations while minimizing exposure to this additional layer of taxation. Proper GST planning is particularly critical for high-net-worth families and those establishing generation-skipping trusts, where even small oversights can result in significant tax consequences.
The Generation-Skipping Transfer (GST) Tax introduces a distinct layer of complexity for families seeking to transfer wealth across multiple generations. My services are designed to help clients navigate this critical area, ensuring that multigenerational planning is both effective and tax-efficient.
I assist clients in identifying potential skip persons and evaluating the impact of direct transfers, trust terminations, and distributions that could trigger GST Tax liability. By carefully structuring trusts and other planning vehicles, I help families maximize the use of their GST Exemption while minimizing exposure to the flat-rate tax. Because the GST Exemption is non-portable, I provide proactive guidance on affirmative allocation strategies, whether during life or at the time of death, ensuring that the exemption is fully utilized and that assets are passed to future generations in the most tax-efficient manner possible.
Additionally, I advise on integrating GST planning with broader estate and gift tax strategies, including lifetime gifting, marital and charitable deductions, and trust-based planning techniques. This holistic approach allows clients to coordinate all layers of the federal transfer tax system, preserving wealth, achieving family objectives, and reducing the risk of unexpected tax liability.
Through detailed analysis, tailored trust structures, and careful exemption management, my services empower clients to confidently implement multigenerational wealth transfer strategies that protect their legacy and ensure compliance with complex federal tax rules.
My Assistance
Advanced Planning & Wealth Preservation Strategies
For high-net-worth families and sophisticated clients, basic estate and gift tax planning often provides only part of the solution. Advanced planning strategies allow for the strategic preservation of wealth, minimizing transfer tax exposure while maintaining flexibility and control over assets. These tools are designed to address both current and future growth in wealth, ensuring that appreciation and complex assets can be transferred efficiently across generations.
"Freezing" Estate Value: GRATs and Sales to Grantor Trusts. One of the most effective strategies for transferring the future appreciation of assets is the use of a Grantor Retained Annuity Trust (GRAT) or a sale to a grantor trust. A GRAT allows the grantor to retain an annuity interest for a set term while transferring the remainder interest to beneficiaries. By leveraging the actuarial assumptions under IRC §7520, the grantor can minimize the gift value reported for tax purposes, effectively “freezing” the estate value at the time of transfer. Any asset appreciation beyond the IRS-calculated rate passes to beneficiaries gift-tax-free. Similarly, sales to grantor trusts can shift future growth out of the taxable estate while retaining certain income benefits, providing powerful leverage in wealth transfer planning. These techniques, governed by IRC §2702, require careful structuring but can substantially reduce estate tax exposure.
Excluding Assets from the Gross Estate: ILITs. Another cornerstone of advanced planning is the use of Irrevocable Life Insurance Trusts (ILITs). By placing life insurance policies in an ILIT, the death benefit is removed from the grantor’s taxable estate, preventing estate inclusion under IRC §2042. ILITs are frequently funded using annual exclusion gifts structured with Crummey Powers, ensuring that contributions qualify as present interest gifts and take full advantage of the gift tax exclusion. For clients seeking liquidity to pay estate taxes or to provide inheritances without expanding the taxable estate, ILITs offer a highly effective solution.
Leveraging Valuation Discounts. For families holding interests in closely held entities or family businesses, valuation discounts can play a critical role in reducing transfer tax exposure. Through structures such as Family Limited Partnerships (FLPs) or Limited Liability Companies (LLCs), interests can be transferred at a reduced value due to minority interest and lack-of-marketability discounts, consistent with the Fair Market Value principle. These discounts reflect the economic realities of restricted control and marketability, allowing significant tax savings while preserving family ownership and control of assets. Sophisticated valuation analysis is essential to ensure compliance with IRS standards and to withstand potential challenges.
Navigating Retained Control & Chapter 14. While retaining certain powers over transferred assets can provide flexibility, excessive control may trigger inclusion in the gross estate under IRC §§2036 and 2038, or lead to anti-abuse adjustments under Chapter 14. Historical cases such as Byrum illustrate the pitfalls of failing to properly relinquish control when seeking valuation or transfer benefits. Modern planning requires careful calibration of retained powers, ensuring that the grantor’s estate planning objectives are achieved without inadvertently causing assets to be pulled back into the taxable estate or invalidating valuation discounts.
By combining these advanced strategies—freezing estate value, excluding assets, leveraging valuation discounts, and carefully managing retained control—clients can achieve highly tailored, tax-efficient wealth transfer solutions. These techniques, when properly structured and coordinated, allow for the preservation and growth of family wealth across multiple generations while ensuring compliance with complex federal tax rules.
Advanced estate planning requires more than a basic understanding of exclusions and deductions—it demands strategic structuring of assets, trusts, and valuation techniques to preserve wealth across generations. My services are designed to provide clients with comprehensive guidance in implementing these sophisticated strategies.
I assist clients in establishing and managing Grantor Retained Annuity Trusts (GRATs) and sales to grantor trusts, helping to transfer the future appreciation of assets in a tax-efficient manner while leveraging the actuarial rates under IRC §7520. For life insurance planning, I guide clients in creating Irrevocable Life Insurance Trusts (ILITs), often funded with Crummey Powers, to remove the death benefit from the taxable estate and provide liquidity for heirs.
For families holding interests in closely held businesses or family entities, I provide expert advice on valuation discounts, including minority and lack-of-marketability discounts, ensuring compliance with IRS standards while maximizing the transfer of wealth at reduced tax cost. I also counsel clients on the careful management of retained powers and control, navigating the constraints of IRC §§2036, 2038, and Chapter 14 to avoid unintended estate inclusion or anti-abuse adjustments.
Through a combination of advanced trust structures, valuation planning, and retained control strategies, my services empower clients to implement highly tailored wealth transfer solutions. The result is a sophisticated, legally sound, and tax-efficient plan that protects family wealth, accommodates future growth, and secures a multigenerational legacy.
My Services
Viacheslav Kutuzov | International & U.S. Taxation Expert
We minimize your taxes domestically and internationally...
Viacheslav Kutuzov
VIACHESLAV KUTUZOV, Esq.
International and U.S. Taxation Expert
New York Tax Attorney & Counselor-at-Law (6192033)
55 Broadway, Floor 3, New York, New York 10006
We apply international standards of confidentiality
ISO / IEC 27001 Information security management
