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We designed this guide exclusively for Illinois residents with $1M+ in investable assets or an estate with near $4 million or greater in total value. If you own a business, real estate, or a significant investment portfolio, the unique tax landscape in the Land of Lincoln makes proactive planning essential. Illinois is one of only a handful of states with its own estate tax. With an exemption threshold of just $4 million, many families who worked a lifetime to build their wealth are affected without realizing it. We have seen firsthand how a lack of awareness about Illinois’s estate tax, its non-portability between spouses, and its “cliff” estate tax structure can cost families hundreds of thousands of dollars or more that proper planning could have preserved. This guide covers various strategies our team uses to help Illinois clients navigate these challenges; from structuring Credit Shelter Trusts that fully utilize both spouses’ exemptions, to tax-loss harvesting, Roth conversion strategies, and charitable giving vehicles that serve both your values and your tax picture. These are not theoretical concepts. Rather, they are the frameworks we implement for our Illinois-based clients. Disclosure RISE Investment Management, LLC ("RISE" or "RISE Investments") is an investment adviser registered under the Investment Advisers Act of 1940. Registration of an investment adviser does not imply any level of skill or training. This publication is solely for informational purposes and past performance is not indicative of future results. Any description of products, services, and performance results of RISE contained in this publication are not an offering or a solicitation of any kind. No advice may be rendered by RISE Investments unless a client service agreement is in place. Advisory services are only offered to clients or prospective clients where RISE Investments and its representatives are properly licensed or exempt from licensure. All of the information in this publication is believed to be accurate and correct as the date set forth. RISE does not have or accept responsibility or an obligation to update such information. Please note, this article is for education purposes and should not be treated as tax or legal advice. This article is not a substitute for legal or tax advice from your professional legal or tax advisor.

There are multiple ways to own the S&P 500 index including the popular Market Capitalization Weighted (“Market-Cap”) S&P 500 index and the lesser known Equal Weighted (“Equal-Weight”) S&P 500 index. The Equal-Weighted S&P 500 index has begun to outperform the Market-Cap S&P 500 in 2026. The Equal-Weighted S&P 500 index is an effective way to bolster diversification and take advantage of broader market opportunities. Background: Market-Cap vs. Equal-Weight S&P 500 Index Introduction The S&P 500 is the most well-known equity index comprising of the largest 500 corporations in the United States. The most common composition of the S&P 500 is the Market-Cap S&P 500 index which weights each constituent relative to the stock’s market capitalization. Alternatively, the Equal-Weight S&P 500 index assigns an equal weight to each of the 500 constituents.   To visualize the difference between the two indices, here are the top 10 constituents of the Market-Cap S&P 500 index and those same companies’ weightings in the Equal-Weight S&P 500 index. Performance The Equal-Weight S&P 500 index is off to one of the best starts to 2026 versus the Market-Weight S&P 500 index in decades [1]. Despite the recent outperformance of the Equal-Weight S&P 500 index, the long-term relative performance gap between the Equal-Weight and the Market-Cap S&P 500 index is at the largest in decades.   Mean reversion to historical levels would imply considerable relative outperformance for the Equal-Weight S&P 500 index. Rolling Three-Year Relative Performance [2] Long-term outperformance of the Equal-Weight S&P 500 index is primarily driven by greater exposure to smaller companies versus larger companies. The Market-Cap S&P 500 index is overweight the largest companies and is underweight the smaller companies. Financial studies have showed that smaller sized companies outperform larger sized companies over multiple market cycles [3]. Benefits of Equal-Weight S&P 500 Index We observe three main benefits of the Equal-Weight S&P 500 index at the current market juncture.   Disciplined Re-balancing The Equal-Weight S&P 500 index re-balances on a quarterly basis by trimming the positions that have outperformed in the quarter and adding to the positions that have underperformed in the quarter. This mechanism reduces exposure to higher valued larger sized companies and bolsters exposure to cheaper smaller sized companies. Additionally, this disciplined process prevents concentration risk as holdings are re-weighted to the 0.2% target weighting.   Diversification Benefits Exposure to the Equal-Weight S&P 500 index not only significantly reduces concentration risk but boosts exposure to a broader array of industries. The difference in industry exposure of the Market-Cap and the Equal-Weight S&P 500 indices is noteworthy. The Equal-Weight S&P 500 index increases exposure to cyclical industries such as industrial stocks while offering far more reasonable overall sector exposure as opposed to the technology heavy Market-Cap S&P 500 index.   Attractive Fundamentals and Valuations The recent outperformance of the Market-Cap S&P 500 index has solely been driven by multiple expansion as earnings growth over the last ten years is virtually identical [4]. This puts the Market-Cap S&P 500 index at higher risk of multiple contraction. The valuation differential between the Equal-Weight S&P 500 index and the Market-Cap S&P 500 index favors the Equal-Weight S&P 500 index going forward. Conclusion Incorporating the Equal-Weight S&P 500 index in portfolios reduces exposure from Mega-Cap technology stocks and increases exposure to a potentially underweight set of stocks based on industry, size, and valuation. Footnotes [1] Chart of the Week: Year of the equal-weighted S&P 500? Financial Times, as of February 21 st , 2026. [2] The ‘Great Narrowing’: S&P 500 concentration. RBC Wealth Management, as of January 22, 2026. [3] The most referenced study on smaller company outperformance is the Fama-French Three Factor model developed by Universify of Chicago professors Eugene Fama and Kenneth French. [4] 2025 U.S. Value Review Letter. Lyrical Asset Management, as of January 28 th , 2026. Disclosure RISE Investment Management, LLC ("RISE" or "RISE Investments") is an investment adviser registered under the Investment Advisers Act of 1940. Registration of an investment adviser does not imply any level of skill or training. This publication is solely for informational purposes and past performance is not indicative of future results. Any description of products, services, and performance results of RISE contained in this publication are not an offering or a solicitation of any kind. No advice may be rendered by RISE Investments unless a client service agreement is in place. Advisory services are only offered to clients or prospective clients where RISE Investments and its representatives are properly licensed or exempt from licensure. All of the information in this publication is believed to be accurate and correct as the date set forth. RISE does not have or accept responsibility or an obligation to update such information. Please note, this article is for education purposes and should not be treated as tax or legal advice. This article is not a substitute for legal or tax advice from your professional legal or tax advisor.

For many investors, a significant portion of their wealth can become tied to one, or a small number of, stock position(s). This may be the result of long-term investing, equity compensation, the sale of a business, or early investment in a high-performing company. While concentrated stock positions can generate substantial wealth, they also introduce heightened portfolio concentration risk and significant tax considerations.   From a portfolio management perspective, excessive concentration undermines diversification, one of the most reliable tools for managing risk. However, selling a large highly appreciated stock position outright can result in significant capital gains taxes and potentially expose the investor to the additional 3.8% Net Investment Income Tax (NIIT). These taxes can erode a meaningful portion of the wealth created in the stock positions.   The good news is that there are thoughtful strategies available to help investors reduce concentration risk while managing taxes efficiently. Understanding the Risks of Concentration Investors must first understand why concentrated positions warrant attention. When a large percentage of a portfolio is invested in one stock, performance becomes heavily dependent on the fortunes of that single company. Even highly profitable and well-established companies can face market downturns, regulatory challenges, industry disruption, management changes, and earnings volatility. While the stock may have performed exceptionally in the past, relying too heavily on it going forward can expose the investor to unnecessary risk. At the same time, many concentrated positions carry low cost bases due to years of appreciation. Selling these shares can generate sizable capital gains taxes, particularly for investors in higher tax brackets. This creates a natural hesitation to diversify.   The challenge is to balance risk reduction with tax efficiency. Six Strategies to Navigate Concentrated Stock Positions Gradual and Strategic Selling Over Time: One of the most straightforward approaches is to reduce the position gradually rather than all at once. By spreading sales over multiple years, investors can: Manage capital gains tax exposure Potentially remain in lower tax brackets Align stock sales with income fluctuations Take advantage of favorable market conditions   This systematic approach allows investors to steadily reduce concentration risk while maintaining flexibility. In some cases, selling during years of lower income, such as early retirement, can further enhance tax efficiency.   While this strategy does not eliminate taxes, it often results in a lower overall tax burden compared to a large one-time sale that can push the investor’s long-term capital gains tax bracket from 15% to 20%. Tax-Loss Harvesting: Tax-loss harvesting involves selling investments that have declined in value to realize capital losses. These losses can then be used to offset capital gains from selling appreciated stock. For example: Capital losses offset capital gains dollar-for-dollar Up to $3,000 of capital losses can be used to reduce taxable ordinary income each year Unused capital losses can be carried forward indefinitely   When coordinated carefully, tax-loss harvesting can significantly reduce the tax impact of diversifying a concentrated position. This strategy requires ongoing monitoring and a well-structured taxable portfolio, but can be a powerful tool when executed properly.   Gifting Shares as Part of Estate and Family Planning: Gifting appreciated stock to family members or irrevocable trusts can help: Reduce future estate taxes Shift tax implications of future appreciation to heirs Potentially take advantage of lower tax brackets   Annual gift tax exclusions and lifetime exemptions should be used strategically. Additionally, certain trust structures may provide further tax efficiency and asset protection.   It is important to note that heirs typically inherit the original cost basis of the shares, meaning capital gains taxes may still apply when they sell. Regardless, gifting can be an effective long-term wealth transfer strategy when coordinated with broader estate planning. For example, if you have adult children, this strategy can serve a double purpose of transferring wealth, creating more shared experiences with your children, plus potentially reducing estate taxes at the same time. Utilizing Exchange Funds for Tax-Deferred Diversification: Exchange funds are specialized investment vehicles that allow multiple investors to pool their concentrated stock positions in exchange for ownership in a diversified portfolio. Key benefits include: Immediate diversification No capital gains tax triggered at the time of the exchange (in most structures)   However, exchange funds typically come with high minimum investment requirements, long lock-up periods (often seven years or more), and limited liquidity.   After the lock-up period, investors receive a diversified basket of stocks. Exchange funds can be an effective solution for investors with very large positions who want diversification without immediate tax consequences.   Hedging Strategies Using Options: Sophisticated investors may use stock option strategies to manage downside risk while deferring a taxable sale of stock. One common technique is a “collar” strategy, which generally involves buying a protective put option to limit downside risk and simultaneously selling a call option to help offset the cost of the protective put.   This creates a range of potential outcomes where the stock is protected from major losses but may also have capped upside potential.   While collars can be effective risk management tools, they take stock option experience to execute and require careful structuring to avoid unintended tax or regulatory consequences. These strategies are typically implemented with the guidance of financial professionals experienced in derivatives and tax planning.   Donating Appreciated Shares to Charity or Donor-Advised Funds: For charitably inclined investors, donating appreciated stock is one of the most tax-efficient ways to reduce a concentrated position. When shares are donated directly to a qualified charity or Donor-Advised Fund (DAF): The investor avoids paying capital gains tax on the appreciation A charitable deduction is generally available for the full fair market value of the shares donated up to 30% of the investor’s Adjusted Gross Income, subject to additional limitations introduced by recent tax law The charity can sell the stock without tax consequences   Donor-advised funds offer additional flexibility by allowing investors to take an immediate tax deduction while distributing grants to charities over time. For many high-net-worth families, charitable giving becomes a core component of managing concentrated stock risk.   It is important to note that beginning in 2026, the tax deduction benefit of charitable contributions is capped at the 35% tax bracket. For taxpayers in the top tax bracket (37%), the value of their deduction will be roughly 35 cents per dollar donated instead of 37 cents. The Value of an Integrated Strategy In practice, the most effective approach often involves a combination of several strategies rather than relying on just one. For example, a RISE Investments advisor may recommend a combination like the following: Gradual selling over time Paired with tax-loss harvesting Alongside charitable donations And selective hedging for risk management   This coordinated approach allows investors to diversify thoughtfully while keeping taxes under control. However, every investor’s situation is unique. Factors such as income level, tax bracket, investment timeline, charitable goals, liquidity needs, and estate planning considerations all play a role in determining the optimal strategy. Conclusion Concentrated stock positions often represent success. Years of growth, smart decisions, or entrepreneurial achievement. However, allowing a single stock position to dominate a portfolio can expose investors to unnecessary risk that could result in derailment of their financial plan.   At the same time, acting too quickly without considering tax consequences can significantly reduce long-term wealth. With careful planning and the right guidance, it is possible to: Reduce concentration risk Improve portfolio diversification Preserve after-tax returns Align investments with long-term financial goals   In our opinion, proactive management of concentrated positions is one of the most important steps investors can take to protect and grow their wealth over time. A thoughtful, tax-aware strategy can help ensure that the success of yesterday does not become the risk of tomorrow. Disclosure RISE Investment Management, LLC ("RISE" or "RISE Investments") is an investment adviser registered under the Investment Advisers Act of 1940. Registration of an investment adviser does not imply any level of skill or training. This publication is solely for informational purposes and past performance is not indicative of future results. Any description of products, services, and performance results of RISE contained in this publication are not an offering or a solicitation of any kind. No advice may be rendered by RISE Investments unless a client service agreement is in place. Advisory services are only offered to clients or prospective clients where RISE Investments and its representatives are properly licensed or exempt from licensure. All of the information in this publication is believed to be accurate and correct as the date set forth. RISE does not have or accept responsibility or an obligation to update such information. Please note, this article is for education purposes and should not be treated as tax or legal advice. This article is not a substitute for legal or tax advice from your professional legal or tax advisor.

RISE Investments is an independent fiduciary wealth advisor that delivers tailored investment management and financial planning services to our clients. Guided by Integrity, Driven by Your Success. Let's start a conversation Button About RISE Investments We are a fiduciary wealth management firm that delivers tailored investment management and comprehensive financial planning services to our clients. Established in 2019, we are committed to offering highly personalized advice and solutions to help our clients achieve long-term financial security and growth. RISE Investments specializes in serving high net worth individuals and families, mid-career professionals, business owners, employee stock ownership participants, retirees, and individuals preparing for retirement. Read More Our Services Financial Planning Learn More Investment Management Learn More Tax and Advanced Planning Learn More Why RISE Investments We offer a unique value proposition within the wealth management industry. With over two decades of industry experience and a future runway measured in several decades, the independent advisory setting allows RISE Investments to grow alongside our clients and bridge the gap between our client's evolving multi-generational financial planning and investment needs and best-in-class solutions to meet those needs. Fiduciary As a fiduciary, we serve as partners to our clients, upholding the highest standard of care and acting solely in our clients' best interest every step of the way. Additionally, our independent structure allows us to select the best solutions for you, unburdened by product-sale incentives. CERTIFIED FINANCIAL PLANNER® For 50 years, the CERTIFIED FINANCIAL PLANNER® certification has been the standard of excellence for financial planners. CFP® professionals must meet extensive training and experience requirements, and commit to CFP® Board's ethical standards that require putting clients' interests first. That's why partnering with a CFP® professional gives clients confidence today and a more secure tomorrow. Only 30% of U.S. financial advisors are CFP® practitioners. Chartered Financial Analyst® Charterholder A Chartered Financial Analyst (CFA®) is a professional who has demonstrated expertise in investment management, financial research, and portfolio management. The CFA® charter is a globally recognized credential that's considered the pinnacle of professional development in investment management. Alignment We believe alignment is one of the best ways to help our clients achieve their financial goals and objectives, and the majority of our team's personal assets are invested alongside our clients' in RISE's investment strategies. Discipline and Integrity With a focus on long-term capital appreciation and tax efficiency, we seek to maximize client outcomes while safeguarding assets, treating each client’s portfolio as a unique entity tailored to their specific financial goals. Our Story Get In Touch

This guide is designed for Illinois residents with $1M+ in investable assets or an estate with near $4 million or greater in total value. Thank you for your interest! We hope you will find our insights of tremendous value. We will send you the guide after you complete the form below. First Name* Last Name* Email* Zip Code* It never hurts to get a second opinion on your plan. Yes, I'm interested in scheduling a complimentary financial planning consultation with RISE Investments* By filling out this form, you agree to RISE’s privacy policy . You also consent to receive emails from RISE Investments. * Get the Guide We are now offering complimentary consultations! *No cost and no obligation beyond completing a short request form and brief survey. If you check this box, a RISE Investment wealth manager will reach out to you to schedule.

Principal & Wealth Advisor Start at RISE 2024 Industry Start 2015 Education University of Illinois, B.S. Favorite Candy Razzles Thomas Van Spankeren, CFA®, CFP® Principal & Wealth Advisor Chief Investment Officer thomas@riseinvestmentsusa.com Tom is a Principal at RISE, serving as the firm's Chief Investment Officer. In this role, Tom is responsible for the firm's investment research, asset allocation framework, portfolio construction, security/manager selection, and ongoing due diligence process. In addition, Tom serves as a Wealth Advisor offering financial planning that encompasses a goals-based approach for each of his clients. As a Wealth Advisor, Tom takes a holistic approach to focus on all key components of financial planning including cash flow planning, tax efficiency, risk management, and investment planning. Prior to joining RISE, Tom spent seven years at Bank of America Private Bank (formerly U.S. Trust), most recently as a Portfolio Manager. In that role, Tom worked with complex, high-net-worth families and individuals to create, implement, and manage customized investment strategies. Previous to Bank of America, Tom was a Valuation Associate for two years at Duff & Phelps. Tom earned his Bachelor of Science degree in Finance from the University of Illinois Urbana-Champaign in 2015. In addition, Tom is a Certified Financial Planner® ("CFP®") and holds the Chartered Financial Analyst® ("CFA®") designation. Tom is a parishioner at Saint Vincent DePaul Catholic Church in Lincoln Park. Tom is also a regular volunteer at The Shared Table serving hot meals to homeless Chicagoans thru the Catholic Charities of the Archdiocese of Chicago. Outside of the office and volunteering, Tom is often found fishing on a body of water, traveling, or researching 20th century American history. Tom resides in the Lakeview neighborhood of Chicago with his wife, Margaret. Go back to Team page Click here for CFA® and CFP® designation requirements.