Opportunity Zones
Topic
Opportunity Zones offer a rare path to transfer appreciating assets tax-free across multiple generations.
How to Underwrite Pre-C of O Opportunity Zone Projects as an LP
Opportunity Zones as a Strategic Tool for Generational Planning
Opportunity Zones are gaining attention as a cornerstone of intergenerational wealth strategy for ultra-high-net-worth families. Originally created as a federal tax incentive to stimulate economic development, OZs now serve a dual purpose: delivering tax-free growth and reinforcing estate planning goals across multiple generations.
The Power of Tax-Free Appreciation
The core benefit lies in the ability to permanently exclude capital gains on the appreciation of an OZ investment held for at least 10 years. For sophisticated investors and their advisors, this tax treatment transforms OZs from a deferral tool into a powerful wealth transfer mechanism. Post-hold gains can grow completely free of federal capital gains tax, making them ideal assets to hold inside estate structures that value long-term compounding.
Integration with Advanced Estate Planning Strategies
GRATs
When contributed to a Grantor Retained Annuity Trust (GRAT), Opportunity Zone investments can freeze the value of the taxable gift while allowing future appreciation — which is already exempt from capital gains tax under OZ rules — to transfer efficiently to the next generation.
Dynasty Trusts
Holding OZ assets within a dynasty trust enables tax-free growth while shielding the asset from estate taxation and creditor exposure indefinitely.
Post-Hold Gifting
After the 10-year hold period, OZ interests can be gifted to heirs with a full step-up in basis on the original gain and no capital gains tax on appreciation. This enables highly efficient, tax-free intergenerational transfers.
“Opportunity Zones don’t just reduce tax — they create a rare opening for families to pass on wealth with zero tax friction. When used correctly, they become one of the most powerful estate planning tools available.”
Why This Matters for Multi-Generational Wealth
The alignment between OZ policy and estate planning isn’t incidental — it’s strategic. Few vehicles allow for tax-free growth, hard asset stability, and estate protection in one structure. For families thinking two or three generations ahead, OZs are more than a tax play — they’re a long-term, compounding advantage that works across trusts, advisors, and legacy goals.
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