Consider Everything: Tax Planning for Today and the Future

When you’ve been serving wealthy families for more than two centuries, there are few challenges you haven’t come across. From times of uncertainty to times of prosperity, BNY Mellon Wealth Management remains grounded in a deep understanding of who our clients are and we continue to generate highly satisfied, loyal relationships that span generations.

Tax planning and management are key components of Active Wealth: the framework we use to help clients achieve long-term financial success. Proactive tax planning can help reduce the impact that federal, state and local taxes have on wealth, including income, estates, capital gains and property. Tax-efficient investing can be beneficial today, and many strategies can help mitigate the impact of taxes over the long term.

Active Wealth Wheel

Tax Planning for Today 

An important part of maximizing wealth is managing and mitigating the impact of taxes. Federal, state and local taxes can have a significant impact on income, estates, capital gains, and property. Careful consideration of after-tax investment returns and the implementation of tax-efficient strategies are essential for ensuring that clients keep more of their wealth.

There are many ways families and individuals can use tax planning to reduce their tax liability throughout the year. From tax-managed equity to fixed income and alternative investments, BNY Mellon Wealth Management helps you Consider Everything and develop a tax planning strategy that’s right for you.

Minimize Taxes with Tax-Managed Equity

Tax-managed equity portfolios can help you realize gains and/or losses at opportunistic times.

Our process combines passive investing with active tax management. We continually monitor and rebalance portfolios based on client-specific factors such as target benchmarks, risk tolerance and tax considerations. This customized approach enables our specialists to factor in tax implications at every stage, helping you keep more of what you earn.

Tax Efficient Investing

Consider Fixed Income

Generating a consistent revenue stream while minimizing risk and overall tax burden is a precise, active and specialized task at which BNY Mellon Wealth Management excels. Our team considers a broad array of options when developing a fixed income plan, integrating taxable and tax-aware bonds as warranted. We actively seek out value, uncover market inefficiencies, manage interest rates, and maximize trade efficiency in an effort to deliver enhanced after-tax income with the potential for gains.2

Additional Tax Planning Strategies for Managing Your Wealth

While tax-managed equity and fixed income investing are key strategies for tax planning, our astute investment professionals consider every aspect of your balance sheet and explore all necessary options to help protect and manage your wealth.

Additional strategies

Tax Planning for Tomorrow and the Long Term

One of the goals of creating sustainable, multigenerational wealth is to leave behind a legacy that supports your values and philanthropic interests. This requires a significant amount of planning, both financial and non-financial, to protect assets against unintended consequences that might threaten long-term goals.

Building an Equitable Wealth Plan

Estate Planning for Long-Term Tax Efficiency

It is prudent to reduce tax burden for future generations due to estate taxes and the powerful effect of compounding. Good estate planning is critical for preserving and protecting family wealth over multiple generations, and it can substantially improve after-tax outcomes.

Tax Advantages of Trusts

The Tax Advantages of Trusts

Funding trusts can provide tax advantages. Trusts are designed to transfer assets over multiple generations without incurring additional death taxes at each successive generation. A dynasty trust is a popular type of trust that can benefit many generations.

The tax advantage derived from trust planning is realized when the trust’s grantor shifts assets out of his or her estate into a trust, which may direct that the grantor’s children receive all income from the trust assets and receive distributions of principal for certain needs.

Because the transfer will reduce the amount that can be gifted during life and at death, this type of planning is most effective when trusts are funded with assets that have strong potential for future appreciation.

At BNY Mellon Wealth Management, our experts can help you with the creation of a dynasty trust, and other trusts and strategies, to identify what is best for you and your descendants to improve your long-term tax and wealth planning.

A Holistic Approach

Managing costs shouldn’t be the only factor you consider when it comes to tax planning. Banking solutions like securities-based lines of credit, which aligns with our Borrow and Spend Active Wealth practices, can also be beneficial.

Other long-term strategies such as domicile planning, charitable planning and life insurance premium financing can also work to maximize your wealth and minimize taxes. We look at all of this holistically to design and implement a comprehensive plan for short and long-term effectiveness. The key is to start planning early, continue planning as internal and external circumstances change and seek advice from experienced professional advisors.

Our wealth strategists at BNY Mellon Wealth Management have extensive experience working with high-net-worth families and individuals to ensure their dearly-held values and positive impacts on the world are sustained.

To learn more about how BNY Mellon Wealth Management can help you with your tax-planning needs, visit bnymellon.com or call us at (877) 385-9899 to speak with a wealth management professional.

  • 1 Data as of 12/31/21. Past performance is not indicative of future results. Source: BNY Mellon Wealth Management. Results based on estimated after-tax returns of TME S&P 500 and the benchmark. After-tax alpha defined as the difference between post-tax performance of the TME S&P 500 performance and the benchmark. For illustrative purposes only. 
    2 Trades may be crossed using bids or where each client has a need to harvest losses, may be crossed at the price of a 3rd party valuation service. Every attempt is made to match the bonds but slight variations in certain bond characteristics may be required.
  • This material is provided for illustrative/educational purposes only. This material is not intended to constitute legal, tax, investment or financial advice. Effort has been made to ensure that the material presented herein is accurate at the time of publication. However, this material is not intended to be a full and exhaustive explanation of the law in any area or of all of the tax, investment or financial options available. The information discussed herein may not be applicable to or appropriate for every investor and should be used only after consultation with professionals who have reviewed your specific situation. The Bank of New York Mellon, DIFC Branch (the “Authorised Firm”) is communicating these materials on behalf of The Bank of New York Mellon. The Bank of New York Mellon is a wholly owned subsidiary of The Bank of New York Mellon Corporation. This material is intended for Professional Clients only and no other person should act upon it. The Authorised Firm is regulated by the Dubai Financial Services Authority and is located at Dubai International Financial Centre, The Exchange Building 5 North, Level 6, Room 601, P.O. Box 506723, Dubai, UAE. The Bank of New York Mellon is supervised and regulated by the New York State Department of Financial Services and the Federal Reserve and authorised by the Prudential Regulation Authority. The Bank of New York Mellon London Branch is subject to regulation by the Financial Conduct Authority and limited regulation by the Prudential Regulation Authority. Details about the extent of our regulation by the Prudential Regulation Authority are available from us on request. The Bank of New York Mellon is incorporated with limited liability in the State of New York, USA. Head Office: 240 Greenwich Street, New York, NY, 10286, USA. In the U.K. a number of the services associated with BNY Mellon Wealth Management’s Family Office Services– International are provided through The Bank of New York Mellon, London Branch, One Canada Square, London, E14 5AL. The London Branch is registered in England and Wales with FC No. 005522 and BR000818. Investment management services are offered through BNY Mellon Investment Management EMEA Limited, BNY Mellon Centre, One Canada Square, London E14 5AL, which is registered in England No. 1118580 and is authorised and regulated by the Financial Conduct Authority. Offshore trust and administration services are through BNY Mellon Trust Company (Cayman) Ltd. This document is issued in the U.K. by The Bank of New York Mellon. In the United States the information provided within this document is for use by professional investors. This material is a financial promotion in the UK and EMEA. This material, and the statements contained herein, are not an offer or solicitation to buy or sell any products (including financial products) or services or to participate in any particular strategy mentioned and should not be construed as such. BNY Mellon Fund Services (Ireland) Limited is regulated by the Central Bank of Ireland BNY Mellon Investment Servicing (International) Limited is regulated by the Central Bank of Ireland. Trademarks and logos belong to their respective owners. BNY Mellon Wealth Management conducts business through various operating subsidiaries of The Bank of New York Mellon Corporation. ©2022 The Bank of New York Mellon Corporation. All rights reserved.