• •Wall Street Journal reports that high-net-worth individuals are using 'trust stacking' to shift wealth and avoid estate taxes.
• •The IRS is actively investigating these multi-layered trust structures, viewing them as aggressive tax avoidance rather than legitimate planning.
• •The specific threshold of assets that triggers an IRS audit for these structures remains unclear, leaving wealth managers and founders in a state of regulatory uncertainty.

The IRS is escalating enforcement against 'trust stacking,' a strategy where individuals create multiple layers of trusts to minimize estate tax liability. While this practice has become standard among Silicon Valley tech workers and founders looking to shield wealth from the 40% federal estate tax, regulators now characterize these arrangements as abusive. However, wealth managers remain divided on the legality of these complex setups, noting that the IRS has yet to release clear guidance on where acceptable planning ends and evasion begins. Whether the agency successfully reclassifies these trusts will determine if current long-term wealth preservation models remain viable for high-net-worth earners.