Intergenerational Wealth Planning: Helping Clients Build a Lasting Legacy
Building a lasting legacy you can be proud of is no easy feat. Many families seek to preserve and transfer their wealth to future generations. Unfortunately, “70% of affluent families lose their accumulated wealth by the second generation.” This is why intergenerational wealth planning with a financial advisor is essential.
Financial planners use intergenerational wealth planning strategies to mitigate the risk of losing family wealth and preserve clients’ wishes. It can be complicated to help clients build lasting legacies. We’ll share practical strategies and insights to assist your clients with intergenerational wealth planning. Read on to learn how to partner with families to support successful generational wealth transfer.
The Evolving Landscape of Intergenerational Wealth
Intergenerational wealth planning has shifted through the years with changing tax laws and regulations, but its core has remained the same. The passing of intergenerational wealth includes financial assets, real estate, businesses, family heirlooms, and more. Advanced planning is essential to preserve a family legacy, minimize tax implications, and foster harmony.
For example, a client may have a thriving family business that has been handed down for generations. The client will likely have children who may be interested and those who are not. Working with a financial planner helps a family ensure control and fairness while minimizing taxes.
Mom might have a lake house she’s dead set on keeping in the family, or Dad may want to pass on an impressive art collection. Families can experience big issues if wealth transfer is not properly planned.
The evolving nature of modern families, such as blended families or geographically dispersed family members, has impacted wealth transfer strategies. Read on to learn how to implement effective intergenerational wealth planning.
Crafting Effective Intergenerational Wealth Strategies
Financial advisors must understand the best tactics to facilitate seamless intergenerational wealth transfer. There are several key strategies to be aware of when implementing this type of financial planning.
Open Communication
Honest communication among family members is critical during the wealth transfer planning process. Financial advisors can help facilitate open and honest conversations by asking the right questions to get families thinking about their legacy.
Estate Planning Essentials
Financial advisors also implement the foundational elements of estate planning, such as wills, trusts, powers of attorney, and healthcare directives. In intergenerational wealth transfer, a will specifies which of a client’s assets pass to whom. Trusts, such as generation-skipping trusts, life insurance trusts, and revocable trusts, transfer assets to beneficiaries without passing through probate court.
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Tax-Efficient Transfer Strategies
Using tax-advantaged vehicles is an effective method of transferring wealth within a family. It allows families to preserve their wealth and minimize tax burdens. In 2025, an estate tax lifetime exemption of $13.99 million allows tax-free transfers to beneficiaries. Assets beyond the exemption amount can be taxed as much as 40%. However, there are strategies to transfer wealth without an undue tax burden.
Some tax-efficient wealth transfer strategies include:
Annual gifting. Gifting while alive decreases an estate's overall value, which can make an estate nontaxable. The federal government allows tax-free annual gifts of up to $19,000 per person in 2025. The gift-splitting provision enables married couples to individually gift the same person $19,000, making the total gift $38,000 annually.
Irrevocable trusts. A grantor sets up a legal entity (the trust) and transfers asset ownership into the trust’s or trustee’s name. The trustee manages the trust after the grantor’s death. People often include their life insurance policy in an irrevocable trust to minimize tax liabilities.
Charitable giving. Gifts made to charities throughout one’s lifetime are exempt from the federal gift tax. Charitable giving can help reduce federal and state estate taxes while contributing to good causes.
Legacy Planning
Defining a family legacy can be accomplished through legacy planning with a financial advisor. A lasting legacy transcends the mere passing of wealth and encapsulates the passing of values and traditions. Financial planning clients can ensure their values and wealth are transferred using tools like family foundations of impact investing.
Your Role as an Advisor: Partnering with Families
As a financial advisor, you play a big role in helping your clients meet their intergenerational wealth planning goals. Partnering with families requires building strong relationships, facilitating family meetings, coordinating with other professionals, and utilizing technology.
Building Strong Client Relationships
Financial advisors should foster deep client relationships to better understand their clients and their long-term goals. When working with clients, build trust by offering reassurance and empathy. Additionally, understand that some conversations may be sensitive and must be handled carefully.
Facilitating Family Meetings
Productive family meetings are essential when planning for intergenerational wealth transfer. Financial advisors can facilitate family meetings using Asset-Map to discuss wealth transfer plans.
Asset-Map enables clients to see visual representations of their estate and easily make designations. Family dynamics can be challenging during meetings, but remember you are the facilitator and should stay neutral.
Coordinating with Other Professionals
It’s extremely important that financial planners collaborate with others, such as estate planning attorneys and tax advisors. This allows you to put comprehensive plans in place for your clients. Build a network of trusted professionals to refer clients to for specialized assistance. With Asset-Map, you can share a client’s financial picture to give collaborative context to others.
Utilizing Technology
Advanced technologies, including platforms like Asset-Map, help visualize wealth in an easy-to-understand report. These visualizations can model different scenarios to help facilitate stronger client communication.
Overcoming Obstacles: Addressing Common Challenges
Intergenerational wealth planning involves common obstacles that financial advisors may face, including family conflict, differing financial literacy levels, and navigating unforeseen life events.
Family Conflict
Family conflict is extremely common in wealth transfer planning. Some of the most common conflict triggers among beneficiaries are sibling rivalries, lack of clarity in a will, and unequal asset distribution.
To mitigate potential family conflicts, ensure family members are included in important conversations and feel heard. Also, provide clear instructions to clients on how to distribute their assets according to their wishes.
Differing Financial Literacy Levels
Financial advisors can also face challenges when working with family members with varying levels of financial literacy, especially younger generations. The best way to handle conversations is to tailor your communication style to each audience.
When speaking to those with a lower level of financial literacy, avoid jargon and explain the strategies you recommend. Provide educational resources to families to help them better understand intergenerational wealth planning.
Unforeseen Life Events
When working with clients, it’s a good idea to plan for unexpected events such as illness, divorce, or changes in family circumstances. Life can throw curveballs, and preparing for changes makes wealth transfer smoother. Regularly review and update plans to ensure relevancy.
Help Your Clients Build a Legacy That Lasts
Listening to clients’ wishes and understanding complex family dynamics is important to craft the best intergenerational wealth plan. You can help preserve and pass a family’s wealth in the most tax-efficient way to ensure a lasting legacy.
Asset-Map helps you facilitate productive client conversations with advanced visualization features. With Asset-Map, you can effectively plan for the future by seeing a client’s entire financial picture. Explore Asset-Map’s features and schedule a demo today.