Estate planning is often framed as a technical exercise involving documents, tax strategies, and legal structures. But at its core, estate planning is about ensuring the people who matter most are supported and that your wishes are carried out with clarity.
For families with meaningful assets, the difference between a thoughtful plan and an incomplete one can shape not only what heirs receive, but how smoothly wealth transitions across generations. Understanding the tools available and how they fit into your broader goals is an important part of building a lasting legacy.
To help ensure some of the most impactful estate planning considerations were included in this guide, we consulted with estate planning attorney Rebecca MacGregor, founding partner of Fides Law in Newton, Massachusetts.
Using Trusts to Transfer Wealth and Protect Assets
Trusts are often associated with ultra-wealthy families, but they can provide valuable planning benefits for many households seeking greater control, protection, and flexibility in how wealth is transferred.
Supporting Children and Grandchildren
Trusts offer families, particularly parents and grandparents, greater control over the wealth transfer process. If you have young children or grandchildren, you may not want them to receive a substantial inheritance outright at a young age. A trust allows you to establish guidelines that align with your values and long-term goals.
For example, you might direct a trustee to pay for educational expenses, distribute a portion of an inheritance at age 18, another portion after college graduation, and the remainder later in adulthood. Others choose to earmark trust assets for specific milestones such as purchasing a first home or starting a business.
Asset Protection and Estate Tax Planning
Trusts can also be used to protect assets and, in certain circumstances, reduce the size of your taxable estate. Irrevocable trusts, in particular, legally separate assets from your personal estate once they are transferred into the trust. Because those assets are no longer personally owned, they may avoid probate, provide protection from certain creditor risks, and potentially reduce future estate tax exposure.
This added protection comes with an important tradeoff. Once assets are transferred into an irrevocable trust, changes are often difficult or impossible to make.
Specialized Trust Strategies
Trusts come in many forms and can be tailored to specific goals and circumstances. Examples include:
Charitable trusts for long-term philanthropic giving
Special needs trusts to support a child or grandchild with disabilities
Grantor Retained Annuity Trusts (GRATs) for certain wealth transfer and estate planning objectives
Generation-skipping trusts designed to transfer assets to grandchildren
Spousal Lifetime Access Trusts (SLATs), which may help utilize estate tax exemptions while still benefiting a spouse and family
Choosing the Right Type of Trust
The decision between a revocable and irrevocable trust should be made within the context of your broader estate and financial plan. While revocable trusts offer flexibility and ongoing control, irrevocable trusts may provide additional asset protection and estate tax planning opportunities. The right choice depends on your goals, family circumstances, and desired level of control.
Lifetime Gifting Strategies for Wealth Transfer
The IRS allows individuals to gift a certain amount of cash or assets each year without triggering gift tax consequences. In 2026, the annual exclusion amount is $19,000 per beneficiary and is adjusted periodically for inflation.¹
The key phrase is per beneficiary. There is no limit to the number of people you can gift to each year. For example, if you have two children, their spouses, and five grandchildren, you could gift a total of $171,000 annually ($19,000 × 9 people) without gift tax implications.
When implemented over many years, gifting can be an effective strategy for gradually transferring wealth and potentially reducing the size of a taxable estate.
If you exceed the annual exclusion amount, the gift must be reported to the IRS on Form 709. The excess amount generally reduces your lifetime estate and gift tax exemption rather than creating an immediate tax bill. In 2026, the lifetime exemption is $15 million per person or $30 million for a married couple.¹
Certain gifts may qualify for additional favorable treatment. Payments made directly to educational institutions for tuition or to medical providers for qualified medical expenses generally do not count toward the annual exclusion amount.
Estate planning attorney Rebecca MacGregor notes that families may also choose to “superfund” a 529 plan by making up to five years’ worth of annual exclusion gifts at once. Under current limits, this allows contributions of up to $95,000 for an individual or $190,000 for a married couple without reducing the lifetime exemption amount, provided certain requirements are met.
Considerations When Using Lifetime Gifting Strategies
Lifetime gifting can be an effective way to gradually transfer wealth and potentially reduce future estate tax exposure. However, larger gifting programs often benefit from advance planning to coordinate annual exclusion gifts, lifetime exemptions, and broader estate planning goals.
Families should also consider whether outright gifts align with their objectives. While gifting provides immediate access to assets, trusts may offer additional structure when long-term oversight, creditor protection, or asset management is important.
Using Roth IRAs in Wealth Transfer Planning
Roth IRAs can be a valuable wealth transfer tool because qualified withdrawals are generally tax-free. While beneficiaries may be required to take distributions from inherited Roth accounts, those distributions are typically not taxable.
Because Roth IRA owners are not subject to required minimum distributions during their lifetime, assets may continue growing tax-free for a longer period, potentially increasing the amount ultimately passed to heirs.
Evaluating Roth Accounts as a Wealth Transfer Tool
Roth IRAs can be particularly attractive for wealth transfer, but contribution eligibility, income limitations, and distribution rules should be considered as part of an overall retirement and estate planning strategy. Depending on your circumstances, Roth conversions or mega backdoor Roth strategies may also be worth exploring.
Using Life Insurance for Estate and Legacy Planning
Life insurance can play a meaningful role in wealth transfer planning. Death benefits are generally income-tax-free to beneficiaries when received as a lump sum and can provide liquidity to help support surviving family members or equalize inheritances among heirs.
However, life insurance ownership structure matters. Policies owned personally may be included in a taxable estate, which could affect estate tax planning for larger estates.
When Life Insurance May Fit Into a Wealth Transfer Plan
Rebecca MacGregor notes that ownership and beneficiary designations should be carefully coordinated with your overall estate plan. In some situations, an Irrevocable Life Insurance Trust (ILIT) may help address estate tax concerns while preserving the intended benefits for heirs.
Like any planning tool, life insurance should be evaluated alongside your other goals, assets, and wealth transfer strategies to determine whether it remains the best use of capital over time.
Building a Legacy That Reflects Your Goals
A thoughtful estate plan is one of the most meaningful gifts you can leave your family. Whether your priorities include supporting future generations, reducing taxes, protecting assets, or preserving family values, the right strategy can help ensure your wealth is transferred according to your wishes.
Estate planning works best when legal documents, tax planning, beneficiary designations, and family goals are coordinated together. By reviewing your plan regularly and working with experienced professionals, you can build a legacy that reflects both your values and your long-term vision for the people you care about most.
If you’d like to discuss your estate planning goals or review how your financial plan supports your legacy objectives, our team would be happy to help coordinate with your estate planning attorney and other trusted professionals.
