The year 2025 is quickly coming to a close, and with it comes an important opportunity to review your financial strategy. Year‑end planning is especially critical for high‑net‑worth families, where thoughtful decisions can make a meaningful difference in preserving wealth, minimizing taxes and positioning for growth.
To help you finish strong, I’ve outlined 13 key financial planning ideas to consider before the calendar turns to 2026.
1. Being intentional With Your RMDs
Take out Required Minimum Distributions before year-end. RMDs apply to folks who are 73 or older and to beneficiaries who inherit these accounts. If you are subject to RMDs and don’t take them out before the end of the year, there will be a penalty. If you don’t need your RMDs to pay your living expenses, explore other options like giving them directly to charity.
Planning Tip: Utilize Qualified Charitable Distributions (QCDs), which allows you to give up to $108,000 (per individual) or $216,000 (per married couple) in 2025, from your IRA directly to charity WITHOUT needing to pay tax on these distributions, and they count towards your RMD.
2. Charitable Giving Strategies
Consider front-loading charitable gifts. In 2026, the new tax law will set a minimum threshold that an individual taxpayer’s charitable contributions must exceed in order for that taxpayer to get any tax benefit from claiming them as itemized deductions. That threshold is 0.5% of an individual taxpayer’s AGI. Therefore, if an individual taxpayer’s contribution base is $1 million and they itemize their deductions, that taxpayer receives no benefit for the first $5,000 contributed to charity. For individual taxpayers for whom the 0.5% threshold is a concern, they may want to consider front-loading their contributions in 2025, rather than waiting until 2026.
Utilizing a Donor-Advised Fund. A DAF is an account where you can deposit assets for donation to charity over time. The donor gets an immediate tax deduction when making the contribution to the DAF and can still control how the funds are invested and distributed to charity. A DAF can be extremely useful if you hold a security with no cost basis, a highly appreciated stock, or a concentrated position. In all of these scenarios, the tax liability can be circumvented by moving that position to a DAF.
Utilize DAF to “bunch” your charitable contributions. Bunching involves donating several years’ worth of charitable dollars all at once. Contributions to charity are only tax deductible to those who itemize their deductions. This year the standard deduction is $15,750 for single filers and $31,500 for married couples filing jointly.
In order to help your itemized deductions exceed the standard deduction amount, one can “bunch” multiple years’ worth of charitable donations. This allows the donor to exceed the standard deduction, take the itemized deduction, and still distribute the funds over the current and subsequent years.
Planning Tip: Donating appreciated stocks is especially relevant in 2025 since stocks skyrocketed in many areas of the market. It may also apply if you have a concentrated stock position with large unrealized capital gains or for large stock positions that you want to “trim” to derisk your portfolio. For these scenarios, consider donating these highly appreciated securities directly to charity, which helps avoid paying capital gains tax.
3. Roth IRA Conversions
Roth conversions are the process of transferring retirement funds from a Traditional IRA, SEP, or 401(k) into a Roth account. Since a Traditional IRA is tax-deferred while a Roth is tax-exempt, the deferred income taxes due will need to be paid on the converted funds at the time of conversion. There is no early withdrawal penalty for this strategy.
This strategy may be beneficial if a saver believes that the postponed tax liability in the traditional account will be more onerous as retirement approaches. For example, if they think tax rates will go up, they move to a higher tax state, or if they will be earning a higher income in the future.
If you have been laid off this year, Roth conversions may be worth considering, since you may have a lower income than usual. However, be mindful that if paying the tax bill now is too burdensome, then this may not be a good option for you.
Planning Tip: Meet with your tax advisors to determine how much income can be realized within the current tax bracket before “creeping” into the next tax bracket to assess how much in traditional retirement funds to convert to a Roth.
4. Review Your Beneficiary Designations
Beneficiary designations supersede your will. Retirement accounts and insurance policies have beneficiary designations that pass outside of one’s will. Therefore, even if you did estate planning, it’s important to review your various beneficiary designations to ensure that your money is passing according to your wishes.
Beware of changing family dynamics. Did a family member who was a beneficiary on your account pass away this year? Did you want to alter beneficiaries because your family dynamics have changed? Be sure to reach out to your advisor to update them on your situation and discuss best practices. The example often cited is regarding an ex-spouse inheriting your assets, which is a devastating misstep and not unheard of.
Planning Tip: In late 2019, Congress passed the SECURE Act, which eliminated the “stretch” option on distributions from inherited retirement accounts. Under the new rules, most non-spouse beneficiaries are required to fully distribute inherited account balances by the end of the 10th year following the year the account owner dies. Some families may want to consider utilizing a charitable remainder trust to replicate the benefits of the now defunct “stretch IRA.”
5. Estate Planning Considerations
Lifetime exemption is set to increase. In 2026, the lifetime exemption amount is set to increase to $15 million per person in 2026 and it’s permanently indexed to inflation. That change eases the urgency around making large gifts before the end of 2025 because families no longer face a “use it or lose it” deadline.
Review your overall estate plan. Outdated wills and trusts may not reflect today’s laws. Consider whether annual exclusion gifts, which are $19,000 per recipient in 2025, may make sense to reduce your taxable estate gradually. Furthermore, keep in mind that direct payments for tuition or medical expenses remain an underused tool that can move assets out of your estate without affecting your estate tax exemption amount.
Federal rules aren’t the only consideration. States like New York impose their own estate taxes, often with significantly lower exemption thresholds. As a result, thoughtful and proactive planning remains critical to address both federal and state-level implications effectively.
Planning Tip: When deciding whether to transfer assets during life or hold them until death, families must weigh the balance between income and estate taxes.
Under current law, assets passed at death benefit from a step‑up in cost basis: unrealized capital gains are erased, and the basis resets to the market value at the time of death. If heirs sell immediately, they owe no capital gains tax.
By contrast, lifetime gifts carry the donor’s original cost basis. If the asset has appreciated significantly, the recipient may face substantial capital gains tax upon sale. Timing and asset selection therefore play a critical role in gift planning.
Estate size also matters. For estates well above the exemption threshold, gifting can reduce future estate taxes. For others, retaining highly appreciated assets until death may be more tax‑efficient for heirs thanks to the step‑up in basis.
6. Estate Planning In A Lowering Rate Environment
Intra-Family Loans. When structured properly, intra‑family loans can be an effective way to transfer wealth by allowing assets to appreciate above the IRS‑mandated Applicable Federal Rates. Since commercial lending rates are typically higher than AFRs, these loans often present a sensible planning option. The AFR establishes the minimum interest rate required to avoid classification as a taxable gift.
Even with higher AFRs, these arrangements can provide meaningful estate planning benefits, especially for families with reliable income‑producing assets. Combined with the newly increased lifetime exemption thresholds under OBBBA, intra‑family loans remain a tax‑efficient strategy for shifting wealth across generations.
Grantor Retained Annuity Trusts. From a wealth transfer perspective, GRATs become less efficient in a high-interest rate environment. Their success depends on the trust assets outperforming the Section 7520 rate, which serves as the minimum threshold for gift-tax-free appreciation. As rates fall, however, this hurdle becomes easier to clear, increasing the tax-free value that can be transferred.
Planning Tip: As rates continue to fall, consider refinancing old GRATs. When the Section 7520 rate decreases, refinancing an existing GRAT can improve the efficiency of wealth transfer by lowering the hurdle rate the trust assets must exceed to produce a tax-free gift. By rolling the remaining GRAT assets into a new GRAT structured under the lower rate, the grantor may capture additional appreciation for beneficiaries with reduced gift tax exposure.
7. Year-End Trust Administration
Sending Crummey notices. In some cases, an individual may design an irrevocable so that one or more of the beneficiaries have the power to withdraw some or all of each contribution made to the trust. To the extent that a beneficiary can withdraw a contribution to this type of trust, the contribution is a gift to the beneficiary and qualifies for the gift tax annual exclusion. When an individual makes a contribution to the trust, the trust agreement may require the trustee to provide notices to the beneficiaries who can withdraw some or all of the contribution. Even if the trust agreement doesn’t require the trustee to send those notices, it may be advantageous to do so to ensure that the contribution qualifies for the gift tax annual exclusion.
Make year-end distributions from non-grantor trusts. Before December 31st, a grantor or beneficiary of a non-grantor trust might ask the trustee to consider distributing the trust’s income to the beneficiaries who are taxed at lower rates than the trust. This may be more tax efficient, because trusts are subject to compressed income tax brackets and a lower threshold for the 3.8% net investment income tax.
Planning Tip: Under the 65-day rule, the trustee may make a distribution within the first 65 days of 2026 and, for tax purposes, treat it as being made on December 31, 2025. This gives the trustee some extra time to evaluate whether to make a distribution. Of course, the trustee should consider the tax status, goals, and objectives of the trust and beneficiaries before making any tax-motivated distributions to the beneficiaries.
8. 529 College Savings Accounts
Immediate tax savings. A 529 is a tax advantaged college savings account that may provide an opportunity for immediate tax savings if you live in one of the 30 states or more offering a full, or partial, deduction for your contributions to the home-state 529 plan. Most states require you to invest in the in-state plan to receive a deduction for your contributions. Though, there are several states that are considered tax parity states, meaning you can use any state’s 529 plan to receive the deduction.
“Superfunding” 529 accounts. “Superfunding” allows investors to spread a tax-free gift to a 529 account over five years for gift tax purposes. So, a married couple not making any other gifts to the beneficiary during the five-year period can contribute up to $190,000 to a 529 plan for each child and, with the “IRS 709 form 5-year averaging election”, you do not run into gift tax problems.
Planning Tip: 529 assets are not currently factored as assets for the purpose of determining federal financial aid under the FAFSA process if held by grandparents, opposed to parents where they are considered. This may be a wonderful way for grandparents to save for their grandkids higher education without jeopardizing their ability to qualify for financial aid.
9. Make The Most Of Health Savings Account
Max out HSA. Consider maxing out your Health Savings Account, which allows you save and pay for qualified medical expenses with tax-free dollars.
2025 eligibility requirements. To contribute to a Health Savings Account, you must be enrolled in an HSA‑eligible health plan. Contributions are limited each year but roll over indefinitely, allowing balances to grow tax‑advantaged. In 2025, the maximum contribution is $4,300 for individual coverage and $8,550 for family coverage. Those age 55 or older can make an additional $1,000 catch‑up contribution per eligible spouse, bringing the total allowable amount for a married couple to $10,550.
NEW eligibility opportunities. It’s important to note that the eligibility for HSAs will expand in 2026. The new tax bill expands eligibility to people who use independent insurance through the Affordable Care Act (ACA), and opt for either the Bronze or Catastrophic level of coverage. The bill also opens HSAs to people with subscription-style primary-care services, in which they pay an annual fee rather than a per-visit fee to see their doctor. The open-enrollment period for insurance through the ACA is currently under way and ends January 15th.
Planning Tip: Consider letting HSA funds accumulate by investing them aggressively while you are younger when your medical bills may be lower. Once you are in retirement, and your medical bills go up, you will have a substantial HSA account that can be used to pay your higher medical expenses.
10. Spend Remaining Flexible Savings Account Funds
FSAs allow you to contribute pre-tax money, up to a certain amount, to an account that can be used to pay for eligible out-of-pocket health care expenses or eligible dependent care services, such as childcare.
Planning Tip: FSA funds are “use it or lose it,” meaning you generally can’t roll the full amount into the next calendar year. To avoid losing any unspent funds, make a plan to use the money before December 31st.
11. Income Tax Planning Opportunities
Effective year‑end tax planning focuses on accelerating deductions, deferring income, and taking advantage of lower marginal tax rates while avoiding income bunching in future years. A practical starting point is to review your prior tax return, then adjust for current‑year changes such as income shifts, new deductions, or updated tax rates. From there, calculate your projected liability under these conditions.
The accuracy of your projection depends on how much you know about your current finances, which is why it’s best to run the numbers later in the year when more information is available.
Planning Tip: In 2025, the maximum deduction you can claim on your federal tax return for state and local taxes, or SALT, has been bumped to $40,000 from $10,000 for both single and joint filers who earn $500,000 or less. For those with income between $500,000 to $600,000 the deduction will be reduced, and it falls to $10,000 once income hits $600,000.
If your income is in or above the phaseout range, consider ways you can defer income into 2026 to qualify for a higher SALT cap this year. Folks with the most flexibility with this type of planning are people who have control over the timing of their income, like a business owner.
12. Planning For The Alternative Minimum Tax
The AMT tax regime ensures that high‑income taxpayers pay at least a minimum tax by limiting certain deductions and exemptions. Under the current rules, households earning $400,000 to $600,000 or exercising incentive stock options are most at risk to being subjected to the AMT.
For 2025, the exemption is $137,000 for joint filers AND $88,100 for singles. It begins phasing out once income reaches $1,252,700 for couples and $626,350 for singles.
Next year, exemptions phase out faster starting at $1 million for couples and $500K for singles with a 50% annual reduction, which is up from 25% in 2025. The SALT cap increase also heightens exposure.
Planning Tip: To minimize AMT, consider accelerating income or adjusting deductions. In particular for folks who hold stock options, they should exercise thoughtfully, splitting activity across tax years.
13. Private Foundation Distribution Requirements
Private foundations must make qualifying distributions of at least 5% of the foundation’s assets each year. In general, distributions include grants to public charities and administration expenses (but do not include investment management fees). The failure to make the required annual 5% distribution results in excise taxes on the shortfall.
Planning Tip: Private foundation’s investments should be structured to balance this 5% distribution requirement and various other objectives. Consider utilizing a bond tent to factor in these distributions every year and pairing it with other investments for the necessary growth to achieve its goals.
Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment Advisory Services offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS. ParkBridge Wealth Management is not affiliated with Kestra IS or Kestra AS. Investor Disclosures: https://www.kestrafinancial.com/disclosures.
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