How to Build Generational Wealth

For the 2026 tax year, the annual gift exclusion allows individuals to transfer up to $19,000 per beneficiary without filing a gift tax return, while married couples can gift up to $38,000 per recipient tax-free . Total annual transfers can reach significant sums, such as $304,000 for a married couple gifting to three children and five grandchildren, without impacting the current $15 million individual (or $30 million joint) lifetime estate tax exemption. This technical analysis features Corey Holstein, CPA, and Logan DeGraeve CFP®️ examining wealth transfer under the current Internal Revenue Code. We analyze the strategic benefit of the Step-up in Basis, where non-qualified assets—such as real estate or brokerage stocks—have their basis reset to the fair market value on the date of death, potentially allowing heirs to liquidate assets at a 0% capital gains rate . Furthermore, we address the SECURE Act’s 10-year rule, which mandates that non-spouse beneficiaries of inherited IRAs (IRC §408) must distribute the full balance within a decade, often pushing heirs into their peak earning years and higher tax brackets. __________________ Key Takeaways: 2026 Gift Limit: The per-person exclusion is $19,000; exceeding this requires filing an additional tax return but typically does not trigger immediate taxes due to the high estate exemption. Asset Location: Gifting shares of stock in-kind to grandchildren in the 12% tax bracket can result in a 0% federal capital gains rate upon liquidation. The 10-Year IRA Hurdle: Inherited IRA distributions must be completed within 10 years, making Roth conversions a powerful estate planning tool to reduce the future tax burden on high-earning heirs. Charitable Carve-outs: For charitably inclined families, leaving traditional IRA assets to a 501(c)(3) is often preferred over Roth conversions, as charities pay $0 in income tax on these distributions. _____________________ Chapters: 0:00 2026 Annual Gift Exclusion: Moving Money Tax-Free 0:19 The $19,000 Rule: Per Person, Per Beneficiary 1:20 Married Couples: Gifting $300,000+ Annually Without a Return 2:47 Gifting In-Kind: Transferring Low-Basis Stock to Grandkids 4:40 Step-up in Basis: Eliminating Capital Gains at Death 6:52 High Net Worth Strategy: 2 to 10 Million Dollar Demographic 7:58 SECURE Act: The 10-Year Inherited IRA Distribution Rule 8:45 Are Roth Conversions Always Right for Estate Planning? 10:12 Tax Efficiency vs. Control: Managing Family Dynamics 11:13 Why Charitable Heirs Should Avoid Roth Conversions ____________________ Resources: Meet with us: https://bit.ly/4tfEV6e Education center: https://bit.ly/4vKzaPE Retirement Plan Checklist: https://bit.ly/3QkPmXp _____________________ Sources: Presented by Corey Holstein, CPA, and Logan DeGraeve, CFP®️ of Modern Wealth Management. https://www.irs.gov/businesses/small-businesses-self-employed/frequently-asked-questions-on-gift-taxes https://www.irs.gov/newsroom/irs-releases-tax-inflation-adjustments-for-tax-year-2026-including-amendments-from-the-one-big-beautiful-bill https://www.irs.gov/taxtopics/tc703 https://youtu.be/YiI7qjR0fXQ?si=c46LfHzc-cEhGe8b https://www.americanbar.org/groups/real_property_trust_estate/resources/estate-planning/revocable-trusts/ ______________ Investment advisory services offered through Modern Wealth Management, LLC, a registered investment adviser. The views expressed represent the opinion of Modern Wealth Management a Registered Investment Adviser. Information provided is for illustrative purposes only and does not constitute investment, tax, or legal advice. Modern Wealth Management does not accept any liability for the use of the information discussed. Consult with a qualified financial, legal, or tax professional prior to taking any action.