High-net-worth individuals often employ a smart strategy: instead of selling appreciated assets outright and triggering capital gains taxes, they borrow against them. The trick is maintaining a healthy loan-to-value ratio to stay in the clear. Here's where it gets interesting—when they eventually pass assets to heirs, those holdings get a cost basis step-up, effectively wiping out the accumulated capital gains tax liability. It's perfectly legal financial planning that lets wealth compound across generations without unnecessary tax friction.