Passing Wealth Down
Thomas Handler had dinner with the third richest man on earth shortly before he died. That man left each of his children, who were in their sixties, about half a million dollars.
That is not a tax strategy. It is a philosophy, and the order most families work in is backwards. They solve the estate structure first and the philosophy never, because the structure is the part somebody is paid to handle and the philosophy is the part nobody is.
Get the order right, because it is the whole thing
Decide what the money is for. Then go see the attorney. Not the other way around.
Every estate plan I have seen go wrong technically was fine. The trust worked. The GST exemption was used properly. The structure survived and the family did not, because nobody had answered the question the structure was supposed to serve.
Whittier Trust has been the family office for the Whittier family since 1935. They are on the sixth generation and about $26 billion. Their framing is the best I have heard on this: creating wealth and preserving it are two different skill sets, and almost nobody has both. The person who built it is usually the worst person to design how it gets held, for the same reason a founder is usually the worst person to write his own succession plan.
My own answer, and it is mine, not the answer
I get asked this constantly so here it is plainly. For my three daughters: education paid, including graduate school if they want it, and living expenses while they are in it. Emergencies covered. Up to $150,000 to $200,000 toward a first house. We pay for annual family vacations so we can hold family meetings.
Otherwise, no inheritance.
If they want capital beyond that, they apply for it the way anybody applies for capital, with a plan, for a business or an acquisition, and they get a real answer including no.
I am not telling you to copy that. I am telling you I have a number and it is written down, because the families who get this wrong almost never got the number wrong. They never picked one.
The model a lot of families land on
Most of the families I work with who have thought this through end up somewhere near the same structure, and it is worth seeing written out even if you change every input:
The family bank is the part that does the work. The family holds capital available for a family member who wants to launch or acquire something. Some families restrict it to certain industries. Some require sign-off from three senior family members specifically so that advice has to be sought and a plan has to exist before money moves. The point is not gatekeeping. The point is that a plan reviewed by three people who have built something is worth more to a 31 year old than the check is.
The $70 trillion number, and what the source actually says
You have seen the figure. Seventy trillion, or eighty-four trillion depending on who is repeating it, transferring to the next generation over the next couple of decades. It gets quoted in every deck in this industry.
We went and found the primary sources, and several of the numbers in circulation do not say what people think they say. That is on our corrected statistics page, because a site claiming to be the deepest resource in this category should not repeat figures it has not checked.
What is true regardless of the number: gift and estate planning alone does not solve this. If the technical fix were sufficient, the failure rate would not look the way it does. The hard part has never been technical.
What usually actually happens
Have you written your number down, or is it still in your head? Mine is written down and my kids know it, and I am not sure it would work any other way.