PT - JOURNAL ARTICLE AU - Nathan Sosner AU - Joseph Liberman AU - Steven Liu TI - Integration of Income and Estate Tax Planning AID - 10.3905/jwm.2021.1.134 DP - 2021 Apr 30 TA - The Journal of Wealth Management PG - 78--104 VI - 24 IP - 1 4099 - https://pm-research.com/content/24/1/78.short 4100 - https://pm-research.com/content/24/1/78.full AB - The preservation and transfer of wealth to future generations are among the central financial goals for most high-net-worth families. Using a stylized theoretical model and Monte Carlo simulations, this article quantifies the benefits of income and estate tax planning for growing wealth over generations. The article shows that a family that invests with income and estate tax efficiency in mind can achieve substantially higher wealth levels than a family oblivious to taxes. More important, the article demonstrates that a significant value accrues from integrating income tax efficiency and estate tax planning: Becoming efficient with respect to one tax should make the family even more eager to become efficient with respect to the other.TOPICS: Wealth management, simulations, portfolio management/multi-asset allocation, performance measurementKey Findings▪ Using a stylized theoretical model and Monte Carlo simulations, this article quantifies the benefits of income and estate tax planning for growing wealth over generations. The article shows that a family that invests with income and estate tax efficiency in mind can achieve substantially higher wealth levels than a family oblivious to taxes.▪ The article demonstrates that a significant value accrues from integrating income tax efficiency and estate tax planning: Becoming efficient with respect to one tax should make the family even more eager to become efficient with respect to the other.▪ Our conclusions are robust to moderate declines in pre-tax returns, which might occur in pursuit of tax-efficient investing, and to significant increases in statutory annuity rates involved in estate tax planning techniques.