Personal Finance (Not Investing) • Is there a Bogleheads guide to 'estate taxes'?

Hello,

I understand that for most Bogleheads (myself included), estate tax issues are probably not a major concern. That said, for those whose net worth does make them subject to estate taxes, I’m curious, is there a “Bogleheads” approach to handling this problem?

It seems like the main options include:

• Spending down assets during your lifetime, leaving little or no taxable estate.

• Accepting estate taxes are a 'nice to have' problem and paying the taxes.

• Leaving assets to charity at death (unlimited charitable deduction).

• Using a combination of lifetime gifting and trusts (ILIT, SLAT, GRAT, QTIP, etc.) to reduce the taxable estate and transfer assets to heirs.

For those of you who have explored or even implemented strategies here, how did you learn about the various tools and approaches? Are there any recommended books, threads, or resources that align with the Boglehead philosophy (simple, low cost, practical)? From my cursory research some of these strategies such as ILITs seem quite expensive and use tactics like permanent life insurance which I understand Bogleheads tend to avoid?

Thanks in advance!

No, there is no "Bogleheads" approach, but there are some smart ways to deal with this. None of the Boglehead principles really apply specifically to dealing with an estate tax problem specifically. Keep expenses low of course applies to your tax bill too though.

I've written a lot about this issue and outlined our particular approach (but forum rules prevent me from posting links to that work). Basically, when we realized we were likely to have an estate tax problem we moved almost everything likely to appreciate significantly or pay a lot of income (basically our taxable investments and our small business) out of our estate into a type of Intentionally defective grantor trust (IDGT) called a Spousal Lifetime Access Trust (SLAT) in exchange for one of our exemptions plus promissory notes that are now almost paid off. Essentially, we've eliminated our estate tax problem, literally saving millions in taxes.

The downside of this approach, aside from the obvious complexity, is that we lose the step up in basis at death on all the assets in the SLAT. We try to manage this as best as we can by continually raising basis via donation of appreciated shares to charity. We were very motivated to do this back in 2021 when it looked like the estate tax exemption would be lowered instead of increased like it eventually was.

You don't need to put permanent life insurance in your irrevocable trust, but it does have its advantages, mostly the guarantees and the lack of taxation as it grows.

Statistics: Posted by JBTX — Mon Oct 27, 2025 9:38 pm — Replies 26 — Views 1479