You’ve spent decades building your success, navigating market shifts, and growing your footprint. Making sure your lifetime of achievement is protected for those who follow in your footsteps is your logical next step.
Strategic generational wealth planning provides a clear roadmap to keep your family’s financial foundation secure for decades to come.
Navigating the Upcoming Great Wealth Transfer
Trillions of dollars are expected to change hands as older generations pass down their assets over the next twenty years.
Without a very proactive, careful approach to transferring that wealth, administrative delays and government intervention could erode much of that value.
One of the most pressing issues involves the tax barrier.
As of January 1, 2026, the federal gift and estate tax exemption has increased to $15 million per person, or $30 million for married couples.
Although this sounds like plenty of breathing room, these elevated thresholds are still subject to shifting political climates and the eventual sunset of current tax laws.
Wielding Smart Wealth Transfer Strategies for Your Heirs
Maximizing what you pass on requires strategies that work during your lifetime.
The Power of Strategic Gifting
One of the most effective gifting strategies to family involves the annual gift tax exclusion. In 2026, you can gift up to $19,000 per recipient without dipping into your lifetime exemption.
Think about the math:
If you and your spouse gift the maximum to two children and four grandchildren, you can move $228,000 out of your taxable estate every single year.
Over a decade, that is more than $2 million transferred tax-free.
Eliminate Capital Gains with Step-Up in Basis Rules
This is a critical tool for any legacy, but it relies on a concept the IRS calls "basis."
In simple terms, your basis is the original price you paid for an asset. When you sell that asset later, you owe capital gains taxes on the difference between the basis and the new sale price. However, when you transfer appreciated assets at death—such as a family cabin or a portfolio of blue-chip stocks—the cost basis is "stepped up" to the current market value.
Consider this example:
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You bought stock years ago for $100,000 (your original basis).
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Today, that stock is worth $1 million.
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If you sell it today, you owe capital gains taxes on the $900,000 profit.
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If your heirs inherit it, their new basis "steps up" to the full $1 million.
Because the IRS resets the value to the date of death, your heirs could sell the stock immediately and owe $0 in capital gains taxes. This essentially erases decades of tax liability and preserves the full value of your hard work for the next generation.
Family Limited Partnership (FLP)
For families with diverse holdings, a family limited partnership (FLP) offers a way to maintain control while shifting value.
You can pool real estate, private equity, or business interests into the FLP. By gifting limited partnership interests to your children, you often receive valuation discounts. Because these interests lack control and marketability, their taxable value is lower than the value of the underlying assets, allowing you to move more wealth outside the lifetime exemption.
Using Trusts and Wills as Your Shield
A will is a foundational requirement, but it is often just the beginning.
Wills must go through probate, which is a public and often lengthy court process.
Conversely, trusts for wealth transfer offer privacy, speed, and granular control over your assets.
High-Level Trust Structures
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Irrevocable life insurance trust (ILIT): These trusts remove life insurance proceeds from your taxable estate. This provides your heirs with immediate liquidity to pay wealth transfer taxes without selling family land or business shares.
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Grantor retained annuity trusts (GRAT): These are ideal for rapidly appreciating assets. You place assets in the trust and receive an annuity for a set term. If the assets grow faster than the IRS-assumed rate, all that extra growth passes to your heirs with little to no gift tax.
Managing the Family Business and Charitable Goals
If you are an entrepreneur, transferring wealth involves the delicate task of succession planning for the family business.
Common tools for a smooth transition include:
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Buy-sell agreements: These provide a market for shares if an heir wants to exit.
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Key person insurance: This provides liquidity to keep the business running if a primary leader passes away.
Legacy often includes charitable giving strategies as well.
Tools like donor-advised funds allow you to receive an immediate tax deduction while removing assets from your estate. You can then involve your children in the grant-making process, teaching them the responsibility of wealth management firsthand.
Preparing the Next Generation
Technical legacy planning strategies only work if the recipients are ready.
Many families find success by holding regular family meetings. These aren't meant for airing grievances, but for fostering transparency.
Discussing the purpose of your plan helps prevent conflict and ensures your heirs understand the weight of the responsibility they will eventually carry.
Secure Your Legacy Today
Transferring wealth is an active, ongoing process.
As your assets grow and tax laws shift, your plan must adapt to keep pace. The best legacy is a plan that provides clarity today and stability for your family tomorrow.
Are you ready to audit your current plan?
Consult with a BNC National Bank wealth advisor today to ensure your strategy is built to last.
