Estate Planning Strategies for Large Families
21 Apr Estate Planning Strategies for Large Families
Posted at 09:54h
in Estate Planning
multiple generation. We created a scenario to help you understand the steps that need to be taken. We also discuss some strategies for managing an estate that spans multiple generations, as well as the importance of tax exemptions and professional guidance. Estate Planning with a Large Family: An Example Scenario
Three adult siblings are set to inherit an assortment of assets from their parents. It’s a part of the generational assets that have been built up over several decades. Their parents are unable to manage their estates themselves. The parents have a basic will, but no other documents. They have a will but no other documents. Caroline is grateful to be considered but fears that the job would require a lot of time. She’s also worried that this role could
force her to be distant from her siblings. Some of her siblings have already commented on how she is receiving preferential treatment. They are afraid that Caroline may use her power to keep more of the inheritance than she gives to the others.
After reading through their will, Caroline finds out she’s officially named as
executor of the estate. She is worried that her relationship with her siblings will be damaged if she refuses the job. She wants to save as much time, heartache, and hassle as possible. She weighs the pros and con of her parents’ request that she administer their estate. Caroline has to think about her parents, her, her siblings, her nieces and nephews and her own children. The estate plan will impact them all. Her parents wanted to ensure that future generations would benefit from their legacy and that they would pass on their assets for decades. Caroline’s plan begins after
talking with her siblings. After talking with her siblings, Caroline begins to form a plan.Multi-Generational Estate Planning
It takes careful consideration and planning to preserve generational wealth. Caroline decides to seek professional advice from an estate planning lawyer to ensure that the wealth is passed on to future generations. Her parents’ plan includes giving each of their children an equal share of $12 million. Caroline’s estate lawyer warns her, however, that this is not a good plan. Caroline’s parents should revise their estate planning as soon as possible because the federal gift and estate tax exemptions will change at year’s end.
Current Exemption (2025)
New Exemption (2026)Highest Gift Tax Possible$13.99 million
$5 million
| 40% | Since the new lifetime exemption is going to be reduced by about half the current amount, it will affect the amount Caroline and her siblings are set to inherit. Her parents’ estate with a net value of more than 50 million dollars (including investments, real property, business stakes and other assets) is heavily affected by estate taxes. | |
| Caroline recommends to her parents they create a trust for the families of each of their children. A long-term family trust is a great way to pass wealth to future generations. As long as the assets are in the trust, they will not be subject to gift or estate taxes. Caroline’s parents, with the help of a lawyer specializing in estate planning, create separate trusts for their children. They also appoint a third party (their advisor) to be their successor trustee. This step helps preserve Caroline’s relationship with her siblings because the assets are controlled by trustees. After their parents die, the successor trustee will distribute the assets or reinvest them according to the trust terms. | Five beginner strategies for preserving wealth in a large family | 1. Establish a Family Trust. |
A trust protects your assets from estate tax and keeps them out of probate. You can ensure your wealth is distributed according to your wishes by creating a family trust. Set Up LLCs for Asset Protection
Transfer your family-owned properties or businesses into separate LLCs. This will protect the majority of your wealth against lawsuits and creditors.
3. Maximize Gift and Estate Tax Exemptions
Take advantage of the annual gift tax exclusions and lifetime exemptions to transfer wealth tax-free, reducing the size of your taxable estate.
4. Diversify Your Investments
Spread your wealth across a variety of long-term investments to minimize risks and maximize growth potential.
5. Involve your family
Teach the value of wealth preservation and financial responsibility to your children and grandchildren. Include them in the estate-planning process. Ensure that your legacy is continued into future generations.
Estate Planning Attorney for Families with High Net Worth
At Phelps LaClair, we understand that your family’s wealth is more than just assets. It’s important to preserve and pass on your legacy to the next generations. Our attorneys handle estates of any size, including large families and high-net-worth individuals. We provide estate planning, trust administration and management, as well as estate tax planning. We provide individualized solutions to each client and strive to find the best way to protect your family. Whether you’re navigating the complexities of
estate administration
, need to minimize the size of your taxable estate, or want to make sure your wealth is passed on to the next generation, we can help. Contact us today to schedule an initial consultation
by one of our experienced attorneys. We’re here to help Arizona families like yours build, protect, and preserve their wealth for generations to come.
Images used under creative commons license – commercial use (04.21.2025).
Photo by
Roman Holoschchuk on Unsplash
.
