By Gregg Gonzalez, CFP®
For many families, building wealth is only part of the legacy. The real goal is to ensure that wealth is passed on with purpose, clarity, and care. But wealth transfer doesn’t happen by accident. It takes thoughtful planning, open communication, and the right strategies to prepare the next generation to carry the torch.
In this article, we’ll explore how families can create a multigenerational financial plan that aligns with their values and goals. From trusts and gifting strategies to facilitating meaningful family conversations, this is your playbook for protecting what matters most – both your assets and your relationships.
1. Why Multigenerational Planning Matters
Whether you’re leaving behind a thriving business, a family home, or a portfolio of investments, the way you transfer wealth can shape your family’s future for generations.
Without proper planning:
- Heirs may be unprepared to manage their inheritance.
- Family disputes can arise.
- Taxes and legal fees can eat away at what you’ve built.
Multigenerational planning isn’t just about passing on money. It’s about passing on wisdom, values, and a shared vision for the future.
2. Start with Open Family Conversations
One of the most overlooked, yet powerful, tools in wealth transfer is the family financial meeting.
These conversations help:
- Clarify expectations and intentions.
- Introduce heirs to the family’s financial philosophy.
- Prevent misunderstandings or surprises down the road.
Tips for a successful meeting:
- Choose a comfortable, neutral setting.
- Start with shared goals and values before diving into numbers.
- Involve a financial advisor or estate attorney as a neutral facilitator if needed.
- Keep the tone inclusive, not directive. Focus on collaboration.
Remember, these aren’t one-time talks. They’re ongoing conversations that evolve over time.
3. Use Trusts to Protect and Direct Assets
Trusts are one of the most versatile and effective tools for wealth transfer. They allow you to:
- Control when and how your assets are distributed.
- Protect beneficiaries from creditors, lawsuits, or poor financial decisions.
- Reduce or eliminate estate taxes in some cases.
Common trust types include:
- Revocable Living Trusts: Flexible, avoids probate, ideal for managing assets during your lifetime.
- Irrevocable Trusts: Offer asset protection and tax advantages but cannot be changed once established.
- Generation-Skipping Trusts: Designed to benefit grandchildren, often used in larger estates.
Work with an estate attorney to ensure your trust aligns with your goals and integrates with your overall financial plan.
4. Explore Strategic Gifting Options
The IRS allows you to gift up to $18,000 per recipient (in 2024) annually without triggering gift taxes. For couples, that means $36,000 per person, per year.
Strategic gifting can:
- Reduce the size of your taxable estate.
- Help children or grandchildren with education, home purchases, or business investments.
- Give you the joy of seeing your impact during your lifetime.
Consider:
- 529 College Savings Plans with front-loaded contributions.
- Custodial accounts (UGMA/UTMA) for minors.
- Gifting appreciated assets (like stocks) to family members in lower tax brackets.
Always consult with a tax advisor before implementing large gifts to avoid unintended tax consequences.
5. Prepare Heirs to Receive and Steward Wealth
An inheritance without preparation can do more harm than good. Help your heirs develop the skills and knowledge they’ll need to manage and grow wealth by:
- Encouraging financial literacy through books, courses, or advisors.
- Involving them in philanthropic giving to instill purpose and responsibility.
- Gradually introducing them to the family’s financial professionals (advisor, CPA, attorney).
This isn’t about control. It’s about mentorship and shared ownership of the family’s legacy.
6. Keep Your Estate Plan Current
Life changes, so should your estate plan. Regular reviews ensure that your documents reflect current laws, family dynamics, and financial goals.
Key documents to review include:
- Wills and trusts
- Powers of attorney
- Healthcare directives
- Beneficiary designations
Tip: A common mistake is forgetting to update beneficiaries on retirement accounts or insurance policies, which can override your will.
Final Thoughts: Legacy Is More Than Money
Multigenerational planning is about more than dividing assets. It’s about defining and living out your family’s values, protecting relationships, and empowering future generations to thrive.
By starting conversations early, building a plan with the right tools, and working with trusted professionals, you can turn a lifetime of hard work into a lasting legacy of purpose, connection, and impact.
Need Help Building Your Family Financial Playbook?
Our team specializes in helping families navigate the complexities of wealth transfer with clarity and care. Reach out today to schedule a family planning consultation and take the next step toward a legacy that lasts.
Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.
This information is not intended as authoritative guidance or tax or legal advice. You should consult with your attorney or tax advisor for guidance on your specific situation.
LPL Financial Representatives offer access to Trust Services through The Private Trust Company N.A., an affiliate of LPL Financial. RetireStrong Financial Advisors and LPL Financial do not offer legal advice or services.
