INSIGHTS

Climate Risk Is Showing Up in Your Balance Sheet—Here’s How to Stay Ahead 

by David Liptz, CPA

ARTICLE | May 12, 2026

If you’ve built meaningful wealth, you’re already thinking long-term—legacy, liquidity, and how to protect what you’ve created. One factor that’s becoming harder to ignore: climate-related financial risk. 

We’re seeing it show up in real ways—insurance constraints, property exposure, market swings, and shifting regulations. The goal isn’t to react to headlines. It’s to plan ahead, thoughtfully and tax-efficiently. 

Here are a few areas worth paying attention to:

Managing Operational Risk (and the Tax Ripple Effects)

Disruptions—whether from infrastructure issues, energy volatility, or insurance gaps—can create uneven cash flow. That makes tax planning harder than it needs to be. A more proactive approach helps smooth forecasting, align estimated taxes, and keep capital working efficiently. 

Real Estate: Protecting After-Tax Returns

Property portfolios are feeling pressure from rising premiums, higher deductibles, and in some cases, reduced coverage availability.

A few smart moves to consider:

  • Revisit capital improvement plans to preserve basis and maximize deductions
  • Be intentional about timing sales to manage capital gains
  • Use entities or trusts to isolate risk without disrupting estate plans

When tax, insurance, and ownership strategy are aligned, the impact on long-term returns can be meaningful.

 

Getting More Out of Your Captive Insurance Company

For risks that are underinsured, excluded, or inefficiently priced in the traditional market, a captive insurance company can serve a more strategic role within an overall risk management plan. When structured properly with legitimate risk transfer and market-based pricing, a captive can help improve risk management discipline, stabilize cash flow, and provide a more controlled approach to financing risk over time.

Investing in Resilience (with Tax Upside)

Upgrades that reduce risk can also come with tax benefits:

  • Energy-efficient improvements
  • Infrastructure upgrades
  • Property hardening

Tax credits and deductions shouldn’t drive decisions—but they can improve the math when paired with smart planning.

 

Estate & Legacy Planning: Time to Revisit Assumptions?

As risk profiles evolve, it may be time to revisit key estate and legacy planning assumptions. That could include accelerating gifting strategies, re-evaluating long-held real estate holdings, and ensuring insurance coverage, liquidity planning, and succession strategies remain aligned. Plans that made sense several years ago may need adjustments to reflect today’s financial and environmental realities.

 

Keep It All Connected

The biggest wins come from integration:

– Investment strategy 

– Insurance and risk financing 

– Tax planning 

– Succession and exit plans 

Staying flexible helps you avoid rushed—or costly—decisions later. 

Bottom line:

Climate-related financial risk isn’t a niche issue anymore. It’s another variable in preserving wealth over the long term. With the right planning, it’s manageable—and in some cases, an opportunity to strengthen your overall strategy. 

If you’re thinking about how this fits into your broader plan, please use the form below to reach out.

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David Liptz

David Liptz

Principal

David brings decades of experience to Larson Gross, including many years leading his own firm and serving clients in the captive insurance industry. Guided by a “Pura Vida” philosophy, he brings a grounded, relationship-focused approach to helping clients pursue their goals with clarity and confidence.

Recognized as a 2015 Top 50 Captive Performer, David leads a team dedicated to providing thoughtful support, practical guidance, and education to the captive insurance industry. His work reflects the Larson Gross commitment to genuine relationships, clear communication, and advisory service that goes beyond compliance.