Asset Location for the Family Steward

One of the most common shifts we observe with clients is this: at some point, they realize they are likely going to be able to live their lives as they choose.

The focus moves away from “Will we be okay?” and toward a different question:
“How do we steward what we’ve built?” 

That question—thinking beyond oneself and making decisions based on what’s good for family and others—is at the heart of our Giving Box philosophy. It’s also why our logo is designed the way it is. The Giving Box represents the idea that wealth planning isn’t just about accumulation or consumption, but about intentionally setting aside resources for others—family, community, and causes—as part of a thoughtful, values-driven plan.

This way of thinking isn’t an add-on to our process; it’s core to how we approach planning.
Watch a short video explaining the Giving Box concept.

One practical expression of that stewardship mindset is asset location—deciding where assets are held, not just what assets are owned. In particular, taxable (after-tax) investment accounts can play an important role for families thinking carefully about legacy and long-term impact.

Asset Location as a Tool for Stewardship, Risk, and Tax Awareness

As wealth grows, many families begin to think differently about risk. The question often shifts from “How much risk should we take?” to “Where should we take that risk?”

An intentional, stewardship-oriented approach recognizes that different account types are taxed differently—and that those differences can influence how both risk and growth are allocated across a portfolio.

Taxable investment account trading activity is generally subject to capital gains tax, while interest, bond income, and certain dividends may be taxed as ordinary income. Long-term capital gains are often taxed at lower rates than ordinary income, and investors typically retain control over when gains are realized.

In addition, under current law, assets held in taxable accounts may receive a step-up in cost basis at death. This can significantly affect the after-tax outcome for heirs.

For example, an investment purchased for $1 million that grows to $3 million by the time it is inherited may pass to heirs with a $3 million cost basis. If the asset is sold shortly after inheritance, capital gains taxes on the $2 million of appreciation may be minimal or nonexistent under current rules.

Because of this combination—capital gains treatment during life and potential step-up at death—some families choose to budget more of their portfolio’s growth-oriented risk inside taxable accounts, while allocating more conservative, income-focused assets to tax-deferred retirement accounts.

This approach isn’t about taking more overall risk. It’s about aligning risk exposure with tax treatment, while maintaining comfort with the portfolio as a whole.

Why This Matters for Family and Legacy

Traditional IRAs and other qualified retirement accounts are generally taxed as ordinary income when distributions are taken by beneficiaries—regardless of how the underlying investments performed.

From a stewardship perspective, this distinction matters. Assets that experience meaningful long-term growth may pass more efficiently to heirs when held in taxable accounts, while retirement accounts may be better suited for assets designed to provide income, stability, or liquidity.

This doesn’t eliminate risk, nor does it guarantee better outcomes. Market volatility, transaction costs, liquidity needs, and future changes in tax law all play a role. What it does offer families is choice—and clarity.

Choice over when gains are realized; flexibility in gifting or charitable planning; a clearer understanding of how assets may impact heirs; and a portfolio structure that reflects intention, not just accumulation.

Stewardship Over Optimization

There is no single “best” way to structure assets. Asset location decisions involve trade-offs, and what works well for one family may not be appropriate for another.

Stewardship means coordinating investment decisions with tax realities, personal comfort with risk, and long-term intent—rather than optimizing any one variable in isolation.

For families who have reached a point of financial confidence and are now thinking beyond themselves, asset location becomes less about maximizing returns and more about aligning wealth with values.

The views expressed represent the opinion of Resolute Wealth Advisor, Inc. (RWA). The views are subject to change and are not intended as a forecast or guarantee of future results. This material is for informational purposes only. It does not constitute investment advice and is not intended as an endorsement of any specific investment. Stated information is derived from proprietary and nonproprietary sources that have not been independently verified for accuracy or completeness. While RWA believes the information to be accurate and reliable, we do not claim or have responsibility for its completeness, accuracy, or reliability. Statements of future expectations, estimates, projections, and other forward-looking statements are based on available information and the RWA’s view as of the time of these statements. Accordingly, such statements are inherently speculative as they are based on assumptions that may involve known and unknown risks and uncertainties. Actual results, performance or events may differ materially from those expressed or implied in such statements. Investing in equity securities involves risks, including the potential loss of principal. While equities may offer the potential for greater long-term growth than most debt securities, they generally have higher volatility. International investments may involve risk of capital loss from unfavorable fluctuation in currency values, from differences in generally accepted accounting principles, or from economic or political instability in other nations. Past performance is not indicative of future results.