Multi-Generational Wealth Transfer
The Situation
A couple in their mid-70s with a $5 million estate approached Ivory Oak Capital to create a comprehensive wealth transfer strategy. They wanted to provide for their three adult children and seven grandchildren while minimizing estate taxes and maintaining control during their lifetimes. Their estate included a mix of retirement accounts, taxable investments, real estate, and a family business. They had outdated estate documents and no coordinated gifting strategy. Key concerns included: how to transfer wealth tax-efficiently across multiple generations, whether to use trusts and what types, how to handle the family business succession, how to treat children and grandchildren equitably, and how to maintain flexibility for their own needs while implementing transfer strategies.
Our Approach
Dylan T. Franzten coordinated with the couple's estate attorney and CPA to create a comprehensive multi-generational wealth transfer strategy. The planning process included estate tax projection modeling under various scenarios, analysis of gifting strategies including annual exclusion gifts and lifetime exemption utilization, evaluation of trust structures including irrevocable life insurance trusts, grantor retained annuity trusts, and dynasty trusts for grandchildren, family business succession planning with buy-sell agreements and valuation strategies, charitable giving strategies to reduce estate taxes while supporting causes they cared about, and coordination of beneficiary designations across all accounts to optimize tax efficiency.
The Outcome
The couple now has a comprehensive wealth transfer strategy that will efficiently pass wealth to children and grandchildren while minimizing estate taxes. They established irrevocable trusts funded with systematic annual gifts, removing appreciating assets from their taxable estate. A family limited partnership was created for the family business, allowing gradual transfer of ownership while maintaining control. Dynasty trusts were established for grandchildren to provide multi-generational wealth transfer with asset protection. The coordinated strategy is projected to save over $1.5 million in estate taxes compared to no planning. Their updated estate documents reflect their current wishes and family structure. They implemented a systematic gifting program that transfers wealth during their lifetimes while maintaining sufficient assets for their needs. The couple has peace of mind knowing their legacy will be preserved and their family will benefit from their life's work in a tax-efficient manner.
What This Means for You
If you have significant wealth and want to create a tax-efficient multi-generational transfer strategy, comprehensive estate planning coordinated with financial and tax advisors is essential. Every family's situation is unique, but the process of analyzing your estate, modeling tax implications, and implementing appropriate structures can help you preserve your legacy while minimizing taxes. This case demonstrates how coordinated planning addresses the complex intersection of estate planning, tax strategy, and family dynamics in wealth transfer.
Ready to Plan Your Wealth Transfer Strategy?
If you want to create a tax-efficient multi-generational wealth transfer plan, let's discuss your estate and family goals.