How Capital Gains Strategy Changes When You’re Ultra-High-Net-Worth

As your wealth grows, so does the impact of each financial decision.  

Portfolio management isn’t just routine anymore at higher levels of wealth. It now carries greater tax exposure, broader consequences, and far less margin for error.  

Capital gains planning is a clear example. At ultra-high-net-worth levels, it’s no longer just a line item on a tax return. It becomes a strategic lever—one that influences investment risk, long-term returns, estate outcomes, and the wealth ultimately transferred to future generations.  

The mechanics of capital gains may be familiar. The stakes are not.  

In this article, we’ll explore how capital gains strategy evolves as wealth increases—and why thoughtful, coordinated planning with a trusted fiduciary partner becomes essential at higher levels of complexity.  

What Actually Changes at the Ultra-High-Net-Worth Level  

As net worth rises, the central question shifts.  

Instead of: “How do I reduce taxes this year?”  

It becomes: “How do I manage my finances in a way that minimizes lifetime tax exposure and supports long-term family goals?”  

Many families arrive at this inflection point unintentionally. Wealth accumulates through years of disciplined investing, business ownership, or equity compensation. But the tax implications, particularly when it comes to capital gains, begin to feel disproportionate to the decisions themselves.  

Several dynamics drive this shift:  

Appreciation is meaningful—and often concentrated.  

Large unrealized gains make selling emotionally and financially difficult.  

Decisions ripple outward.  

A sale today affects future income, estate structure, charitable plans, and after-tax returns.  

Planning silos break down.  

Portfolio management, tax planning, and estate strategy become tightly connected. A move in one area rarely stays contained.  

This is where experienced guidance matters—not to eliminate complexity, but to purposefully manage it.  

Common Capital Gains Triggers for UHNW Families  

While every situation is unique, certain moments consistently bring capital gains planning into focus:  

A business sale or liquidity event  

Often the largest taxable event of a lifetime. Planning before the transaction can materially change the outcome.  

Concentrated stock positions  

Company stock, founder shares, or long-held investments can create both opportunity and risk. 

Portfolio rebalancing after years of growth  

What worked historically may now introduce unintended exposure.  

Philanthropic planning  

Charitable goals often intersect with capital gains decisions in powerful ways.  

Each of these moments can benefit from a strategy that looks beyond the immediate tax bill.  

Core Capital Gains Strategies for Ultra-High-Net-Worth Planning  

There is no single solution to managing gains at substantial levels of wealth. But several approaches consistently help families manage taxes while keeping long-term goals on track.  

1. Managing the Timing of Gains  

Timing remains one of the most effective tools available. 

Selling assets gradually—rather than all at once—can help: 

• Smooth taxable income 

• Reduce exposure to higher marginal rates 

• Create flexibility as circumstances evolve 

At higher wealth levels, timing is less about short-term optimization and more about aligning gains with a multi-year plan. 

2. Using Losses Strategically—Without Compromising the Portfolio  

Tax-loss harvesting becomes more valuable as portfolios grow, but it must be handled carefully. 

The objective isn’t to chase losses. It’s to use them intentionally, offsetting gains elsewhere while preserving the integrity of your investment strategy.  

When done well, this approach lowers taxes without allowing tax considerations to override sound portfolio construction.  

3. Using 351 Exchange Funds to Transition Out of Concentrated Positions 

For families with large, low-basis concentrated stock positions, selling outright is often not the best first step. 

A 351 exchange fund allows an investor to contribute concentrated stock into a diversified investment vehicle without triggering immediate capital gains tax. In exchange, the investor receives shares in a broader portfolio aligned with long-term objectives. 

This approach can: 

• Reduce concentration risk 

• Defer capital gains taxes 

• Improve diversification without forcing a taxable sale 

351 exchange funds are not appropriate in every situation, but when used thoughtfully, they can serve as a powerful bridge between tax efficiency and prudent risk management. 

4. Using Separately Managed Accounts (SMAs) for Ongoing Tax Control 

Separately managed accounts offer a high degree of control over tax outcomes—particularly valuable for ultra-high-net-worth families. 

Unlike pooled investment vehicles, SMAs allow: 

• Individual security-level tax-loss harvesting 

• Customization around existing holdings 

• More precise capital gains management 

• Better alignment with estate and gifting strategies 

SMAs are especially effective when combined with a multi-year tax plan, helping families manage gains gradually while staying invested according to their objectives. 

5. Coordinating Capital Gains and Estate Planning  

For ultra-high-net-worth families, capital gains strategy and estate planning are inseparable.  

This coordination may involve:  

• Transferring appreciated assets to heirs in lower tax brackets  

• Using trusts to shift future appreciation out of the taxable estate  

• Leveraging step-up in basis rules where appropriate  

These strategies are highly individualized, but when aligned properly, they can significantly reduce both income and estate tax exposure.  

6. Donating Appreciated Assets  

For families with charitable intent, gifting appreciated assets is often one of the most efficient planning opportunities available.  

By donating stock or other appreciated investments:  

• Capital gains tax is avoided  

• A charitable deduction is preserved  

• Portfolio risk can be reduced  

Donor-advised funds add flexibility, allowing families to separate the tax decision from the timing of their charitable giving.  

Capital Gains Planning Is Also Risk Management  

Taxes are only half the equation. Risk is the other.  

Concentrated positions often present a difficult tradeoff: selling triggers taxes but holding increases exposure. A well-constructed plan helps unwind these positions gradually, reducing risk without creating avoidable tax drag.  

The goal isn’t to choose between tax efficiency and prudent investing. It’s to achieve both, in the right sequence.  

How Capital Gains Decisions Fit Into the Broader Wealth Plan  

For the families we work with, capital gains planning rarely stands alone. It overlaps with:  

• Investment strategy  

• Business and exit planning  

• Philanthropy  

• Estate and multi-generational planning  

• Cash flow and lifestyle considerations  

When these elements are coordinated, decisions feel clearer. Instead of reacting to events, families operate from a defined framework—one that evolves as life changes.  

When to Revisit Your Strategy  

Capital gains plans don’t require constant adjustment, but certain events warrant a review:  

• An unusually high-income year  

• Equity compensation or liquidity events  

• Updates to an estate plan  

• Major charitable gifts  

• Growing concentration risk  

Addressing these moments proactively often leads to better outcomes—and fewer regrets.  

How Plancorp Supports Ultra-High-Net-Worth Families  

We help families navigate capital gains decisions with clarity and intention. Our role is to:  

• Explain options in clear, precise language  

• Model outcomes across multiple years  

• Coordinate closely with tax and estate professionals  

• Reduce taxes without undermining long-term returns  

• Support complex equity, business, and philanthropic planning  

As fiduciaries, we focus on what serves your interests—not just today, but across generations.  

Capital gains planning becomes more consequential as wealth grows. These decisions aren’t just financial—they’re strategic, personal, and enduring. 

If you’ve reached a higher level of wealth, now is the time to pressure-test your plan. Complexity grows with success—and so do the stakes. A thorough review can uncover blind spots, missed opportunities, and risks that may not have been obvious before. 

Our comprehensive financial analysis will give you: 

• Instant scores in four key areas of your financial plan 

• Curated resources to help align your plan with your goals 

• Personalized next steps to capture every opportunity 

Start your analysis today and make sure your plan is built to support your goals—now and for the future.