4 min read

Estate Planning Can Keep Assets in the Family

Maintaining generational wealth is notoriously difficult. Of more than 3,200 affluent families interviewed by researchers throughout the ’80s and ‘90s, 70 percent involuntarily lost assets after wealth was transitioned to the next generation.* What will happen to your assets in the future? Between taxes and poor money management, the money and property that you’ve worked hard to earn could be gone within 10 years of your death… or those assets could help sustain your loved ones for decades to come. Estate planning is the best way to make sure that your assets are protected and passed down to future generations. 

How Estate Planning Can Preserve Family Assets

Estate planning is a personal process. It’s about creating protections around your specific assets and providing the most support that you can for your loved ones. Your family’s needs will dictate what kind of estate planning tools will best help you accomplish your goals, but there are a few common ways that estate planning protects assets. 

Estate planning can keep non-family members from controlling assets. Hopefully, your relatives will enjoy long and successful relationships with their partners. In reality, messy divorces can happen in any family. You probably don’t want a relative’s ex-spouse keeping your beloved family vacation home in the divorce. Through estate planning, you can dictate exactly who inherits what—and who doesn’t get to inherit. Assets that belong solely to your beneficiary may be protected from their spouse if the couple does have a contentious split. 

And if you’ve been divorced, you may use the estate planning process to make sure your ex isn’t set to inherit anything you don’t want them to have. If you had named them as the beneficiary on a retirement account while you were married, for example, you’ll want to update that designation while estate planning.

Estate planning can be used to keep young or financially immature family members from having free access to assets too early. What took you a lifetime to build could take an impulsive grandchild just months to spend. Controlling the rate at which assets are transferred to family members prevents anyone from squandering their inheritance. Estate planning can be used to make sure that younger family members can’t access money and property until they’re mature enough to manage them responsibly. 

Trusts can be customized to meet your family’s needs. For example, you may hold assets in a trust until a beneficiary turns 30 or reaches a certain educational benchmark. It can also be possible to hold assets in a trust and empower a trustee to use their discretion around distributions. This setup can be useful in cases with beneficiaries who have struggled with poor financial decision-making or substance abuse. The trustee can evaluate the beneficiary’s status and withhold distributions if they’re not able to responsibly manage them. 

These are just examples of how trusts can be used to help preserve assets, but there are any number of ways to structure trusts during the estate planning process. 

Estate planning can protect assets from being seized by creditors or lost during probate. Helping your loved ones avoid probate can be one of the most significant benefits of estate planning. If you die without a will, or fail to make adequate plans for transferring assets to your heirs, a probate court judge will have to make some of the decisions around settling your estate. Probate can be expensive and emotionally difficult. If family members disagree about how the estate should be settled, the ensuing legal battle may incur huge attorney bills and cause a permanent rift. 

Plus, any of an estate’s assets that have to go through probate may be open to seizure by any creditors of the deceased. Estate planning can remove certain assets from needing to go through probate, helping your family bypass this potentially costly process.  

Estate planning can minimize your tax burden, keeping more money in the family for future generations. Estate taxes can swallow a tremendous portion of your wealth before anything is distributed to your heirs, and they can affect even individuals who aren’t super wealthy. For 2021, the federal estate tax only applies to an estate that’s valued at more than $11.7 million. If someone dies in 2021 with an estate worth more than $11.7 million, their estate may pay an estate tax of 40 percent on everything above the $11.7 million exemption. With such a high threshold, the federal estate tax won’t apply to many individuals—but there are two big things to consider. 

First, the federal estate tax exemption amount could be slashed in the future. The Biden administration has previously expressed an intention to cut the exemption amount by 50 percent. Such a change would make many more estates subject to this tax. While there’s no reason to worry about what changes may or may not happen in the future, it’s worth remembering that your estate plans may need to be updated as tax law evolves.  

Second, you may also have to take into account your state’s estate taxes. Twelve states and Washington, D.C. impose their own estate taxes. Massachusetts residents have to be aware of the state’s especially low estate tax exemption of just $1 million per individual. Many residents with moderate incomes leave behind estates that owe the estate tax in Massachusetts. Estate planning can be used to minimize your estate tax obligation, preserving more of your assets for your family members to inherit. 

From money to real estate to precious family heirlooms, your assets belong with your family—and estate planning can help you make sure that’s where they stay. Sachetta Callahan is here to help you protect the things and people that matter most. I’m happy to answer any questions you have about estate planning and protecting your assets. Contact me today!


Eric Sachetta, ChFC®, CFP® is a Certified Financial Planner™ practitioner and focuses on financial planning and client relationship management. Eric believes that estate planning provides an opportunity to “look at all things that you value, see how they fit together, and make choices to balance everything and to maximize the things you want to do.”



*Sources: NAEPC Journal of Estate & Tax Planning The Future of Estate Planning

“Preparing Heirs: Five Steps to a Successful Transition of Family Wealth and Values” by Roy Williams & Vic Preisser