As a high-net-worth business owner or investor, you’ve built something valuable. But every April, the reality sets in: Taxes are one of your biggest expenses.
The ultra-wealthy don’t just accept high tax bills—they plan proactively to help minimize them. Tax-efficient wealth structuring, strategic income deferrals, and asset protection planning can mean the difference between keeping your wealth working for you or losing it to the IRS.
At Finley Davis Private Wealth, we work with business owners, multi-generational families, and ultra-high-net-worth investors to design tax strategies that help protect and sustain their wealth. Because in the world of wealth, what you keep matters more than what you make.
1. Business Entity Structure: The Foundation of Tax Efficiency
How your business is structured determines how much you pay in taxes. Yet, many business owners default to the wrong entity structure, costing them thousands (or even millions) in avoidable taxes.
S-Corp, C-Corp, or LLC? Choosing the Right Structure:
Example: A private manufacturing business owner generating $12M annually restructures from an LLC to a C-Corp to take advantage of the 21% corporate tax rate. By implementing an executive benefits package and structured dividend payouts, they defer $4M of taxable income—helping reduce their personal tax liability by approximately $1.6M per year.
Are You Optimized for 2025?
A mid-year entity restructuring could help create significant tax efficiencies over the next decade.
2. The Power of Deferred Compensation in Helping Reduce Taxable Income
For high earners, deferring income can be one of the most powerful tax-saving tools. Why? Because shifting income to lower-tax years or retirement allows you to reduce your immediate tax burden while securing long-term financial benefits.
Key Deferred Compensation Strategies
Non-Qualified Deferred Compensation (NQDC) Plans – Allows executives and business owners to defer income into future years, often at lower tax rates.
Cash Balance Pension Plans – Enables contributions far beyond 401(k) limits, helping reduce taxable income while compounding assets.
Private Placement Life Insurance (PPLI) & Premium Financing – Converts highly taxed investment income into tax-advantaged growth inside a life insurance structure.
Example: A real estate developer with $15M in annual earnings implements a PPLI strategy, deferring $5M of investment gains annually into a tax-efficient insurance structure. Over 15 years, this approach can help generate significant tax-deferred growth, helping to protect wealth from income and estate taxation.
Why It Matters: Ultra-HNW tax planning isn’t just about reducing today’s tax bill—it’s about strategically positioning assets for future opportunities.
3. Asset Protection Strategies That Also Provide Tax Advantages
High-net-worth families face two major risks: excessive taxation and potential lawsuits. The right strategies can mitigate both.
Tax-Advantaged Asset Protection Structures
Irrevocable Trusts – Shift assets out of your taxable estate, help reduce liability exposure, and control how wealth is distributed.
Family Limited Partnerships (FLPs) & Grantor Retained Annuity Trusts (GRATs) – Transfer assets to heirs at discounted tax values while retaining control.
Dynasty Trusts – Helps preserve wealth for multiple generations, with assets compounding outside the estate indefinitely.
Example: A privately held business owner with a $500M net worth moves a portion of their company shares into a GRAT, locking in today’s lower valuation while transferring significant wealth to heirs at a reduced estate tax cost. This strategy can help create potential savings of nearly $120M in estate taxes over multiple generations.
Why This Matters: True wealth isn’t just about accumulation—it’s about long-term preservation and efficient transfer.
The More You Plan, The Less You Pay—Let’s Strategize for 2025
Smart investors don’t wait until tax season—they plan ahead to help reduce tax liabilities and protect generational wealth.
At Finley Davis Private Wealth, we collaborate with tax attorneys, CPAs, and estate planners to develop customized tax strategies designed for ultra-high-net-worth clients.
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