Wealth Transfer Planning: Building a Legacy That Connects Generations

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Key takeaways:

• Transparent estate planning. Open communication among family members reduces conflict and aligns expectations when planning intergenerational wealth transfers
• The One Big Beautiful Bill Act. It permanently raised estate, gift and generation-skipping transfer tax exemptions.
• Trusts add control and flexibility. They are useful for managing illiquid assets and preserving wealth across generations.

The importance of generational wealth planning 

Over the next decade, baby boomers are expected to leave, on average, nearly $1.4 trillion to their Gen X children annually, according to financial research firm Cerulli Associates. Given the emotions that often surround both the passing of a loved one and money, one of the most crucial yet delicate tasks facing a family with substantial assets is creating an estate plan that safeguards the financial future of heirs while minimizing potential family conflicts.

The One Big Beautiful Bill Act, which was signed into law in July 2025, permanently increased the exemptions for gift, estate and generation-skipping transfer tax, removing one of the greatest uncertainties that families face in their estate planning.

Taking this into account, families should approach estate planning strategies with both a strategic vision and sensitivity. By crafting a plan that supports long-term financial goals while fostering open, thoughtful conversations with heirs, they set the stage for a more seamless and harmonious transfer of assets to future generations.

What is a transparent estate plan?

Transparency with your heirs, as well as close consultation with legal and financial advisors, is key to building a legacy that reflects your family’s intentions and supports lasting harmony, says Tony Reiss, a senior wealth strategist at Fifth Third Private Bank.

“Clients should be having conversations with their children and grandchildren about the structure of their estate. They don’t even have to talk about numbers,” he said. “Just outlining the basic framework now can save a lot of problems down the road.”

One key element of a transparent estate plan is determining how assets will be distributed, whether that’s immediately or over a longer term through vehicles such as trusts, which can offer both structure and flexibility.

What are the benefits of using trusts in your estate plan?

Because of the complexity of transferring substantial wealth, starting the legacy planning process early is essential. By age 55, individuals need to decide whether to bequeath assets outright or place them in a trust. Before drawing up an estate plan, families need to assess such things as their children’s financial acumen and judgment. If there is a family business, the children’s desire to continue the business legacy needs to be taken into account, Reiss said. 

Leaving assets immediately to children saves some legal and administrative burden, but that seemingly straightforward path can quickly become complicated when a business, rather than liquid assets, constitutes the bulk of the estate. Unlike stocks and bonds, a closely held business might have unique challenges around valuation, ownership transfer and tax exposure, particularly when multiple heirs have differing levels of participation in the business.

How can I tailor trusts to protect future generations?

If affluent individuals want to ensure their assets endure across multiple generations, a trust can provide the structure and flexibility that are essential for family financial planning and long-term wealth preservation strategies.

A trust can provide a steady income to direct heirs, while leaving flexibility for them to request distribution of the principal under specified circumstances, such as medical expenses or college tuition. It can also avoid the expense, publicity and time involved in the probate process. For more information on probate and estate planning, see Fifth Third Private Bank’s article, “Comprehensive estate settlement plan essentials.”

“If an heir has financial difficulties or leads an extravagant lifestyle, the coffers may be empty for the next generation,” Reiss says. “Trusts can protect children from themselves.”

How do I include a family business or real estate in my estate plan?

Distributing other illiquid assets, such as homes or vacation properties, also requires careful planning. Even if the heirs agree on who should receive which property, it’s important for parents to determine the assets’ values and devise a strategy to equalize the distribution in advance. Tools like life insurance, buyouts or mortgage products are options to be considered.

Wealth held in private equity can also be a challenge: Heirs may not care to wait 10 to 15 years for their payout, nor be able to make further required investments with the firm.

What are the advantages of gifting assets during my lifetime?

Rather than relying solely on traditional estate planning tools, some individuals choose to share their wealth with their children during their lifetime, taking advantage of the gift tax exemption to do so thoughtfully and strategically.

“It can bring great comfort and joy,” Reiss says, “to give children funds to support a growing family, buy a bigger house, send children to private school or even fund a lifestyle.”

There can also be significant tax advantages to giving wealth away during one’s lifetime, Reiss says. If a wealthy individual or family gives assets away today, future appreciation is attributed not to the estate but to the heirs, who would be taxed at the lower capital gains rate when they sell the property.

Why should I discuss my estate plan with my children early?

“Your detailed estate plan needs to be addressed early,” Reiss says, noting that studies have shown that families who communicate openly have the highest probability of a successful outcome. “For a business owner, waiting until retirement to reveal that the business will go to the child who’s been most involved can lead to misunderstandings or hurt feelings among other children.”

As part of the family conversation about wealth transfer, it’s crucial that parents talk about the structure of the proposed estate plan and the reasoning behind it. Doing so ensures that beneficiaries understand the intentions and logistics of the plan and how it aligns with the family’s goals. For example, if a trust is involved, heirs will understand why the plan provides them with income rather than the assets directly.

“An approach like that can prevent conflict among siblings,” Reiss says, “and talking about it ahead of time can affect how the heir thinks about their parents and their understanding of what they did and why.”

Who should be part of my estate planning advisory team?

In addition to open family communication, assembling a trusted team of advisors, including a financial advisor, estate lawyer and tax expert, is essential to navigating estate planning with confidence and care.

“Having the different advisors in the room helps avoid mistakes up front and helps ensure that the team is providing the best advice,” Reiss says. “When we’re working with our clients, not only is Fifth Third Private Bank at the table, but we have the clients’ attorneys, CPAs and insurance advisors all in the room.”

By starting the estate planning process early and having detailed conversations with your heirs about how your wealth will be passed on, you can reduce the potential for misunderstandings, ensure your intentions are clear and preserve family harmony for future generations.

For more information about estate planning, contact your Fifth Third Private Bank advisor.