Key Estate Planning Strategies for Today’s Market

A smiling senior couple sitting at a table, meeting with a professional man who is holding a clipboard and documents

Estate planning is getting renewed attention as markets stay uneven and tax rules move closer to potential changes. For many families, plans written years ago no longer line up with current asset values or tax limits. What once felt settled now needs another look, especially for households focused on long-term wealth planning rather than short-term fixes.

Market swings, higher interest rates, and the scheduled expiration of several tax provisions have forced the issue. Uncertainty adds risk, but it can also create openings for families willing to review their plans early, often with professional advice to avoid costly missteps.

Why Market Conditions Matter Right Now

Estate planning rises and falls with asset prices. Stocks, real estate, and business interests are all tied to the market, and those values shape how much tax may be due when wealth changes hands. This is particularly true for owners of family businesses, where valuations can shift quickly during volatile periods.

The Federal Reserve’s Financial Accounts of the United States show that household net worth has moved sharply in recent years, climbing and falling with market conditions instead of following a smooth path. (1)

That matters because lower values can reduce the taxable size of a gift or estate. If assets rebound after being transferred, the growth generally sits outside the original owner’s taxable estate. For planners, this is one of the few clear advantages that market downturns can offer.

Lifetime Gifting Remains a Core Strategy

Lifetime gifts remain a common way to pass on wealth during one’s lifetime. In 2025, an individual may transfer up to USD$19,000 to each recipient without incurring gift tax or reducing the lifetime exemption. Couples who file jointly can double that amount, allowing transfers of up to USD$38,000 per recipient. (2)

When markets dip, gifting assets such as investments or ownership interests can be especially effective. Any later growth belongs to the recipient and doesn't add to the estate’s taxable value. This approach is often used as part of broader wealth planning strategies rather than as a one-off transaction.

Beyond annual gifts, individuals can also use part of the federal lifetime estate and gift tax exemption. Decisions at this level typically involve coordination with an estate planning attorney in Rockville, Maryland, or one near you to ensure transfers are structured correctly.

Trust Planning Gains Attention in Volatile Markets

Trusts have always been part of estate planning, but volatile markets have renewed interest in structures designed to move future growth out of taxable estates.

One example is the Grantor Retained Annuity Trust, or GRAT, a type of grantor trust that allows an individual to transfer assets while receiving fixed payments over a set number of years. If the assets outperform the IRS’s assumed interest rate, the excess value may pass to heirs with little or no gift tax. That assumed rate, known as the Section 7520 rate, is published monthly by the IRS, which makes timing a real consideration. (3)

Other trust structures, including a living trust, may also play a role depending on family dynamics, asset mix, and long-term planning goals.

Retirement Accounts Require Careful Coordination

Retirement accounts often make up a large share of personal wealth, yet they're frequently sidelined in estate planning discussions. Market declines have brought renewed attention to Roth IRA conversions, especially among families trying to manage future tax exposure for heirs.

When account values drop, converting a traditional IRA to a Roth IRA can lower the tax owed at the time of conversion. Once converted, future growth is generally tax-free, which can be an advantage for beneficiaries. This matters more now that most non-spouse beneficiaries must withdraw inherited retirement accounts within 10 years under current IRS rules. (4)

Without careful planning, those withdrawals can push beneficiaries into higher tax brackets and reduce the overall value passed on.

Estate Planning and Income Taxes Are Now Closely Linked

Estate planning doesn't operate on its own. Income tax decisions increasingly shape outcomes, particularly in volatile markets. Tax-loss harvesting, for example, allows investors to sell assets at a loss to offset taxable gains elsewhere.

When investment strategy and estate planning aren't aligned, the result can be unnecessary tax exposure. Coordinated planning, often guided by professional advice, helps reduce these risks.

Keeping Plans Current and Clear

Estate plans should change as personal circumstances change. Marriage, divorce, new children, health issues, or business transitions all justify a review. This is especially true for families balancing personal assets with ownership stakes in family businesses.

An elderly couple sitting at a kitchen table, focused on reviewing paperwork together

The U.S. Census Bureau reports that blended families and non-traditional household structures are increasingly common, which adds complexity to inheritance planning. (5)

Clear communication matters just as much as technical planning. Many disputes come from confusion or unmet expectations, not tax mistakes.

Conclusion

Estate planning today is less about predicting markets and more about staying flexible. Asset values move. Tax rules change. Plans that sit untouched can fall out of step quickly. Strategies such as gifting assets, trust planning, and thoughtful handling of retirement accounts can reduce risk when used carefully. With regular reviews and guidance from an estate attorney when needed, families can maintain control over how wealth is transferred, even in an uncertain financial environment.

References:

“Financial Accounts of the United States”, Source: https://www.federalreserve.gov/releases/z1/dataviz/z1/balance_sheet/chart/
“Frequently asked questions on gift taxes“, Source: https://www.irs.gov/businesses/small-businesses-self-employed/frequently-asked-questions-on-gift-taxes
“Section 7520 interest rates”, Source: https://www.irs.gov/businesses/small-businesses-self-employed/section-7520-interest-rates
“Retirement plan and IRA required minimum distributions FAQs”, Source: https://www.irs.gov/retirement-plans/retirement-plan-and-ira-required-minimum-distributions-faqs
“Census Bureau Releases New Estimates on Families and Living Arrangements”, Source: https://www.census.gov/newsroom/press-releases/2024/families-living-arrangements.html