Families who want their money to last for generations need a long-term plan. The goal is to grow wealth, reduce taxes, and pass assets to children and grandchildren with fewer problems.

Good planning protects more wealth. Waiting too long or ignoring basic tax rules often creates avoidable losses.

Clarify the long-term goal

A strong multi-generational plan focuses on three ideas.

1. Protect purchasing power.
2. Reduce yearly taxes.
3. Make it easier for heirs to receive assets with less tax exposure.
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Account types, investment placement, and gifting strategies all play important roles.

Choose the right accounts

Some accounts help families transfer wealth more efficiently. Roth IRAs and Roth 401(k)s are strong choices because heirs can take money out tax-free.

Traditional IRAs and 401(k)s have different rules. Many heirs must empty inherited retirement accounts within ten years. This speeds up tax collection and reduces the time the money can grow.

Taxable accounts offer another important benefit. Many assets receive a step-up in basis at death. This can eliminate taxes on gains that occurred during the original owner’s lifetime.

Manage annual tax drag

The taxes you pay each year reduce how much your money compounds. Active trading and high-turnover funds often create unnecessary taxes.
Low-turnover index funds usually produce fewer taxable gains. Tax-loss harvesting and municipal bonds can also help reduce yearly taxes.

Place assets in the right accounts

Different investments have different tax treatments. Income-producing assets often fit well inside tax-deferred accounts. Investments with long-term gains or qualified dividends often fit better in taxable accounts.

High-growth assets in Roth accounts can be especially powerful because future growth can pass to heirs tax-free.

Align investments with estate tax rules

Federal estate tax rules shape how much wealth reaches the next generation. Starting in 2026, the estate tax exclusion will rise to fifteen million dollars per person. This provides families with more flexibility to make gifts and long-term transfers.

Standard IRS estate and gift tax rules continue to apply below this threshold.

Use trusts to support long-term planning

Trusts are essential tools for families with long-term goals. Irrevocable trusts move appreciating assets outside your taxable estate. Grantor trusts allow you to pay taxes on trust income, which helps the trust grow faster.

Directed trusts let advisors manage investments while trustees manage administration. Dynasty trusts can last for many generations in certain states, keeping assets protected from repeated estate taxes.

Structure gifts over time

Lifetime gifts shift future growth out of your estate. Early gifts have more time to compound. Gifts made within current limits can transfer meaningful wealth without triggering federal estate taxes.

Gifts to 529 plans support education. Gifts to irrevocable trusts create structure, control, and long-term stability.

Manage concentrated positions

Some families hold large stock positions with a very low cost basis. Selling them can result in substantial tax bills. Holding them until death may erase those taxes through a step-up in basis.

When a position is too large, careful strategies such as staged selling, charitable remainder trusts, or pairing gains with losses can reduce taxes.

Evaluate real estate choices

Real estate offers several planning benefits. It provides depreciation, may qualify for 1031 exchanges, and often receives a step-up in basis at death.

Families often use LLCs and trusts to manage liability, taxes, and long-term ownership.

Align family governance with tax strategy

A long-term plan works only when heirs understand it. Family meetings, written investment guidelines, and clear communication about trusts help prepare younger generations to manage wealth responsibly.

Prepare heirs for inherited accounts

Inherited accounts have specific rules. Beneficiaries must follow deadlines, distribution schedules, and reporting requirements. Teaching heirs how these accounts work helps them avoid costly mistakes.

Balance control, simplicity, and tax efficiency

Families want tax savings but also simplicity. The best plans find a balance. Over time, a smart plan becomes easier to manage.

Start early for maximum impact

Early decisions matter. Early Roth conversions, early gifting, and early trust funding allow wealth to grow more effectively over time. A long-term

legacy is built one strong decision at a time.

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Disclaimer: Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through TOP Private Wealth, a registered investment advisor and separate entity from LPL Financial.

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