Building significant wealth is one challenge. Passing it to the next generation in the way you intend is another. An inheritance may include investment and retirement accounts, real estate, business interests, trusts, and other assets, each with its own tax, legal, and planning considerations. Without coordination, your children may be left making complicated decisions about wealth they’ve never had to manage before.
Estate and legacy planning gives you the opportunity to decide how those assets should transfer and what role you want that wealth to play in your family’s future. For families with substantial assets, that may also mean considering how to preserve wealth across generations, prepare children for what they’ll eventually receive, and coordinate the financial plan with your estate planning attorney and tax professional.
Start With an Estate Plan
A will is an important part of an estate plan, but it doesn't control every asset you own. Retirement accounts and life insurance policies generally pass according to their beneficiary designations, while jointly owned property and assets held in certain trusts may also pass outside of a will.
If you die without a valid will, you're considered to have died intestate, and state law generally determines who inherits assets that are subject to probate. That may produce a very different result from what you would have chosen.
A current estate plan can spell out your wishes, identify the people you want making financial or healthcare decisions if you're unable to do so, and give your family clearer direction after your death.
Your wealth manager can also work with your estate planning attorney and tax professional so your financial accounts and beneficiary designations reflect the legal documents you've put in place.
Understand the Tax Side of an Inheritance
An inheritance doesn't automatically mean your children will owe federal income tax on everything they receive. The type of asset matters.
For example, thebasis of inherited property is generally its fair market value on the date of the owner's death, although exceptions apply. If your child later sells an inherited investment or property, that basis is generally used to determine the resulting capital gain or loss.
Retirement accounts work differently. Beneficiaries of traditional IRAs and many workplace retirement plans may owe income tax when they take taxable distributions, andspecific distribution rules apply to inherited retirement accounts.
For families with larger estates, federal estate taxes may also become part of the discussion. For someone who dies in 2026, thefederal estate tax basic exclusion amount is $15 million. State estate or inheritance taxes may apply separately depending on where you live and what property you own.
These differences are one reason it can be helpful to review the types of assets you're leaving behind rather than focusing only on the total value of your estate.
Think About How Your Children Will Receive the Money
Leaving assets outright isn't the only option. Depending on your family's circumstances, a trust may allow you to set parameters around how and when assets are distributed.
That can be helpful when a child is young, isn't comfortable managing a large amount of money, or has circumstances that make additional structure appropriate. Trust planning can also become relevant when you're thinking about assets you hope will eventually benefit grandchildren or later generations.
These decisions are highly individual, and trusts come with their own legal, tax, and administrative considerations. An estate planning attorney can help you determine whether a trust belongs in your plan and which type fits your goals.
Make Your Estate Easier to Navigate
Some of the most effective estate planning has little to do with complicated legal strategies. Consider whether your children would know where to find your important documents. Do they know which financial institutions you use? Is there an updated list of accounts, insurance policies, real estate, and professional contacts somewhere your executor can access?
Beneficiary designations deserve attention as well. An old designation on a retirement account or insurance policy may no longer reflect your wishes after a marriage, divorce, death, or other family change.
You don't need to hand your children every account statement today. Having organized records and making sure the right people know where to find them can make their job easier when the time comes.
Decide What You Want Your Wealth to Do
Legacy planning gives you an opportunity to think about the purpose behind the assets you're leaving. You may want your children to have flexibility to use the money as they choose, or may prefer additional structure around a large inheritance. Perhaps you'd like some of your wealth to support grandchildren, education, or charitable organizations that have been important to your family.
Those preferences can influence how your estate plan is designed. They can also lead to useful conversations with your children while you're still here, particularly if they'll eventually be responsible for managing significant assets.
Plan the Inheritance You Want to Leave
The more wealth you’ve accumulated, the more there may be to coordinate before it passes to the next generation. Your inheritance plan may involve investment and retirement accounts, real estate, business interests, trusts, and charitable goals, each with its own specific considerations. Planning ahead can help you decide how those assets should transfer and whether the structure you have today still reflects your family and your wishes.
At Anderson Financial Strategies, we help high-income families coordinate the financial side of estate and wealth-transfer planning alongside their estate planning attorneys and tax professionals. If you would like to explore our services for your family or business, call us at 855-237-4545 to schedule an executive briefing to discuss your goals.
About Shon
Shon Anderson is President and Chief Wealth Strategist at Anderson Financial Strategies, LLC, bringing over 20 years of experience delivering family office-style financial planning as a fiduciary. He holds a CFP® and CFA® designation, an MBA in finance from Wright State University, and has been quoted in CNBC, Forbes, Kiplinger, and other leading financial publications. To learn more about Shon, connect with him on LinkedIn.