Countdown in 2025: How High-Net-Worth Individuals Can Outpace the Tax Law Sunset with Strategic Planning

The clock is ticking. With 2025 well underway, high-net-worth individuals, entrepreneurs, and family offices face a rapidly evolving tax landscape. Key provisions from the 2017 Tax Cuts and Jobs Act (TCJA) are on track to expire by year-end, and without proactive planning, many are poised to face higher tax bills, reduced exemptions, and missed financial opportunities.

At Collective VFO, we know the difference between preserving wealth and losing it to unnecessary taxes comes down to one thing: strategy. In this article, we break down the key planning moves every affluent family and business owner should be making now—before the TCJA sunset becomes a financial reality.

 
The Looming Sunset: What’s Changing This Year?

Several TCJA provisions are set to expire at the end of 2025, including:

• Top Income Tax Rate Reversion: The top individual rate is expected to rise from 37% back to 39.6%.
• Estate & Gift Tax Exemption Cut: The federal exemption, currently at $13.99 million per individual, may drop to around $7 million.
• Business Deductions & Depreciation Changes: The phase-out of 100% bonus depreciation is already in motion.
• SALT Deduction Cap Reassessment: Potential revisions to the $10,000 cap on state and local tax deductions are being discussed.

Waiting until late 2025 to act could leave you with limited options—and a bigger tax bill.

 
Proactive Planning: Why It’s Non-Negotiable

Tax filing is backward-looking. Strategic planning is future-focused. The difference is stark: one documents the past, the other shapes your financial future. While many CPAs are trained to report taxes, our Virtual Family Office model is designed to reduce them through collaborative, forward-thinking planning.

Proactive planning requires:

Year-round engagement.
Integrated professionals (legal, tax, investment).
Awareness of legislation, timing, and sequencing.

Additionally, for business owners and entrepreneurs, planning at the corporate level must come first—before addressing personal tax strategies. Corporate entity structure, retained earnings strategies, and executive compensation planning all directly affect personal income and tax exposure. The sequencing of decisions made within your business is critical to building an optimized personal tax plan.

As we outlined in ["The Hidden Cost of Last-Minute Tax Planning"], reactive planning is expensive — not just in dollars, but in lost opportunity.

 
Tactical Moves to Protect Wealth Before the Deadline

1. Charitable Planning: Do Good While Doing Well

Use charitable remainder trusts (CRTs), donor-advised funds (DAFs), or private foundations to reduce taxable income, defer capital gains, and fulfill philanthropic goals. These tools allow you to give strategically while optimizing lifetime tax outcomes.

In addition to these traditional vehicles, there are alternative charitable strategies available through a family office, such as:

• Charitable lead trusts (CLTs) that provide upfront benefits to charities while preserving wealth for heirs.
• Pooled income funds, which offer donors a lifetime income stream while supporting charitable causes.
• Private operating foundations that provide greater control over philanthropic initiatives while unlocking tax advantages.

There are also leveraged charitable strategies, such as:

• Installment sales to charitable trusts, allowing the donor to defer capital gains while receiving income and benefiting a charity.
• Life insurance-funded giving, where policies are used to amplify the value of charitable gifts or replace family wealth given to charity.
• Split-interest structures, which allow for partial gifts with retained income or future interests that benefit both the donor and the cause.

These sophisticated strategies can be integrated into a broader tax, estate, and legacy plan, creating a win-win for your wealth and the causes you care about.

2. Entity Structuring: Design for Tax Efficiency

Reassess your business structure:

• S-Corps can reduce self-employment taxes.
• C-Corps provide opportunities for retained earnings and reinvestment.
• FLPs are powerful for multi-generational wealth transfer with valuation discounts.

Entity structuring isn’t just about legal liability — it’s about long-term tax positioning.

3. Investment Tax Optimization: Real Estate Development with Charitable Option Donations

Now is the time to analyze your investment portfolio through a tax lens:

• Real estate: Use 1031 exchanges and cost segregation.
• Oil & gas: High deductions and energy credits.
• Municipal bonds: Create tax-free income streams.
• Roth conversions: Capitalize on current lower tax rates before they rise.

Tie this into Secure 2.0 strategies to retroactively mitigate 2024 liabilities and optimize retirement income planning.

One emerging strategy involves real estate development paired with charitable option donations. Developers can integrate charitable components into their projects—such as donating public-use land or cultural assets—to receive significant tax deductions while enhancing community impact. These initiatives can reduce capital gains exposure and create long-term tax efficiencies when structured with professional oversight through a Virtual Family Office.

4. Tax Credit Utilization

Credits offer a dollar-for-dollar reduction in taxes owed. Don’t overlook:

• R&D credits for innovation.
• Energy-efficiency incentives (solar, wind, commercial building upgrades).
• Small business hiring or benefit plan incentives.

With the right planning, these credits can create substantial tax savings — and in some cases, even be sold or carried forward to maximize future benefits.

Credits are powerful tools — and many are underutilized.

5. Wealth Transfer & Gifting

Use today’s $13.99M lifetime exemption before it potentially drops in half:

• Fund irrevocable trusts.
• Transfer appreciating assets now.
• Implement valuation strategies and minority interest discounts via FLPs.

Charitable lead trusts (CLTs) and spousal lifetime access trusts (SLATs) also allow creative, compliant wealth shifts.

 
The Power of a VFO: Coordinated Planning Wins

A Virtual Family Office ensures alignment between your CPA, attorney, financial advisor, and insurance strategist. This team-based approach eliminates blind spots and positions your wealth to adapt to complex changes like the 2025 tax sunset.

We work with your current advisors or bring in our own vetted experts — but the key is collaboration.

 
Final Thought: The Window is Closing

There’s no room for delay. The coming tax changes represent both risk and opportunity. With strategic, timely action, you can significantly reduce your lifetime tax liability and enhance your legacy.

Your next move matters.

Schedule a Consultation with the Collective VFO team today to review your current plan, explore opportunities, and build a proactive strategy for 2025 and beyond.