Maximizing Wealth Transfer to Entrust to Future Generations

Estate Planning

Having a proper estate plan in place can assist in generational wealth transfer, ultimately providing for the long-term financial needs of your family. Personal advisors work closely with their clients to ensure that the right assets, along with the correct documentation, are in place to maximize this wealth transfer. The ultimate goal is to pass as much wealth as possible to one’s heirs while minimizing the amount going to the government. Our firm specializes in handling an asset that is incredibly estate friendly and can assist in this process.

1031 Exchange

Section 1031 of the Internal Revenue Code allows investors to trade items which have appreciated in value for items of the same “nature or character” without recognizing income or capital gains on the transaction. This allows the owner to defer capital gains exposure indefinitely. Rare Coins qualify for this treatment as they are considered real property.

Step-Up In Tax Basis

One of the fundamental tenets of estate planning is to incorporate assets that qualify for a step-up in cost basis, thereby eliminating capital gains exposure upon inheritance. Rare coins qualify for this treatment.


First the client purchases rare coins to add to their portfolio. Over time, as opportunities come to sell the coins, the client purchases other rare coins with the proceeds utilizing the 1031 exchange, thus deferring their capital gains. Eventually when their heirs inherit the collection, they can then utilize the step-up in basis to take the collection’s cost basis up to its then current fair market value. Using this strategy properly, clients can completely eliminate capital gains exposure from their investment.
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Under Section 1014(a) of the Internal Revenue Code, the descendant’s basis in their coin will be “stepped-up” to fair market value at time of death. By bequeathing coins to a spouse, the decent allows the spouse to acquire the coins tax-free at their fair market value at the time of death. The spouse can then sell the coins without recognizing any gain or income, which allows years of appreciation to go untaxed.
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Subjective Value

Owning items that have subjective value in your estate provides a great benefit from a valuation perspective. If your estate is comprised of stocks, bonds or commodities like gold, it is very easy to determine the current value and thus apply estate taxes accordingly upon passing. However, if you have items that have subjective value in your estate such as fine art, wine, or rare coins, your family has considerably more control on the valuation of your estate, which could further minimize estate tax exposure.


We understand that estate planning can be complicated and there are many strategies that planners use. Adding subjective value items like rare coins to your estate gives your planner more flexibility and better options when determining the estate’s value. This will give the family more options when developing a comprehensive plan.
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