Multi-Generational Wealth Plans: 4 Strategies Beyond Trusts

Multi-Generational Wealth Plans: 4 Strategies Beyond Trusts 

Trusts are a solid start for generational wealth transfer; but they’re not the whole story. For many Baby Boomers I work with, leaving a financial legacy is as much about preparing their heirs as it is about protecting the money. 

The good news is that financial planning can be personal, strategic, and empowering. Below are four practical approaches that go beyond traditional trust structures to help you pass not just wealth, but wisdom, values, and stability to the next generation.

1. Make Family Conversations Part of the Plan

The biggest nonfinancial factor in successful wealth transfer is the strength of family values and open dialogue across generations. Some of the most effective planning begins not in a lawyer’s office (or even my office) but around the kitchen table. I often encourage families to start low-pressure conversations about their goals, values, and concerns. These don’t have to be formal meetings. In fact, they work best when they’re relaxed, recurring, and collaborative. 

For example, imagine that the Smiths decided to articulate a clear mission statement for their legacy. With four adult children of varying financial circumstances and values, the Smiths wanted to preempt any potential disputes by defining their intentions in writing. After gathering their children together for the first of what would be quarterly conversations, the parents share their mission: “Treat each child fairly, avoiding any perception of favoritism. We want this inheritance to strengthen your relationships, not strain them.” That simple statement shifted the discussion from who-gets-what to how they’ll support each other and continue the family’s values of fairness and family cohesion. The conversations around estate planning became less emotionally charged as the children appreciated knowing that fairness (not favoritism) was the guiding principle, which reduced the likelihood of future resentment or litigation. A relaxed setting, open communication, and a shared purpose can turn estate planning into a conversation about values rather than dollar signs.  

For those who are charitably inclined, a donor-advised fund (DAF) can be a great way to bring the family together. Parents can involve family members across the generations in recommending cherished causes or nonprofits, turning giving into a shared tradition and teaching stewardship along the way. The Smiths can turn their quarterly family meetings into a shared experience to propose causes and review charitable opportunities. Over time, the children began to see philanthropy as a family legacy. The quarterly meetings became a meaningful ritual. It was less about inheritance and more about cultivating empathy, civic engagement, and open dialogue. 

2. Use Roth Conversions to Stay in Control of Your Taxes

Even though the One Big Beautiful Bill Act recently made the current tax brackets permanent, there’s still real value in timing your income strategically. Roth conversions are one tool for this.  

Some retired clients choose to convert a portion of their traditional IRA to a Roth IRA each year, taking advantage of years when their income is lower. This "bracket-filling" approach lets you reduce future required minimum distributions and lower the tax burden on your heirs. Some families go one step further; pairing Roth conversions with gifts to a donor-advised fund to help offset the tax bill.  

Imagine a couple, Susan and David Lee, thinking through the tax impact of their $1.2 million traditional IRA as retirement approaches. They plan to stop working at 65 and know their first required minimum distribution (RMD) will not hit until 73, so they decide to start “bracket-filling” Roth conversions; that is, converting just enough each year to stay within their current 24 percent federal bracket. 

With $80,000 already showing on their return, they choose to convert $100,000 of IRA balance in Year 1 (well below the $110,750 ceiling). The move adds roughly $24,000 in federal tax, but it locks those dollars into a Roth where all future growth will be tax-free and free of RMDs. 

To honor their long-standing charitable habits, the Lees also direct $15,000 to a donor-advised fund that year, trimming part of the conversion’s tax impact. Under the One Big Beautiful Bill Act, itemized deductions are now capped at 150% of the standard deduction for the highest two brackets, so they watch that limit carefully even though they have not yet crossed into those brackets. 

Repeating this process each year (always checking income, deduction caps, and the conversion room) they expect to shift nearly the entire $1.2 million into Roth accounts within six years while continuing to give $90,000 to $120,000 to charity. The real payoff is control: their future tax rate is largely pre-paid, their RMDs disappear, and their heirs will someday inherit a tax-free asset alongside a clear record of the Lees’ philanthropic priorities.

3. Create Liquidity with Life Insurance

When an estate is settled, it likely contains a mix of liquid and illiquid assets (such as real estate or a business). A second-to-die permanent life insurance policy held inside an irrevocable life insurance trust (ILIT), can provide tax-free cash to cover estate taxes, resolve debts, or buy out siblings who would prefer cash over co-ownership. The result: heirs don’t have to sell meaningful property just to make things work. Instead, the family gains flexibility, fairness, and time to make thoughtful decisions. 

Clients sometimes hesitate to buy permanent life insurance, and for good reasons. There are a range of common objections that should be carefully weighed, including cost, age, complexity, perceived lack of need, and a belief that insurance is only for those facing estate taxes. But when you consider the role insurance plays in preserving options and easing transitions, it can be a smart, strategic fit.

4. Give the Grandkids a Head Start

Many Baby Boomers I work with feel a strong pull to help the next generation get a leg up. Two tools that can help do that are 529 plans and the new Trump Savings Accounts. 

We have written extensively about 529 plans, which are commonly used for education-focused gifts. Grandparents can contribute up to five years' worth of gifts at once (currently $190,000 per beneficiary for couples), removing assets from their estate and helping future scholars avoid student debt. 

Trump Accounts, created under the 2025 OBBA law, offer a separate opportunity. These accounts receive a $1,000 federal seed contribution for children born between 2025 and 2028, and family members can add up to $5,000 annually. Withdrawals are taxed at capital gains rates and the use of funds is more flexible than with a 529 Plan, such as college expenses, first-time home purchases, and even to start a business. As with any new policy, smart planning and personalized advice remain essential.  

A Final Thought 

The decisions you make today shape not just your legacy, but your family’s confidence in carrying it forward. As you consider the tools and strategies available, don’t just ask what your wealth can do. Ask what values you want it to carry. 

If these are the kinds of conversations you want to have with your financial planner, let’s talk about whether Sachetta is the right fit for you. We believe planning should be personal, nonjudgmental, and grounded in trust. The best financial strategies are built on real, lasting relationships. 

Some of the persons and/or names in this article may be fictional and intended to either illustrate a concept and/or protect a subject’s privacy. 

Stephen Ahern, CPA/PFS, CFP®, AEP®, MST, is President of Sachetta. He holds a Master’s Degree in Taxation from Bentley University and for over thirty-five years, has provided individual financial, investment, estate, and tax planning, as well as small business consulting, to a diverse base of clients. His clients have included key top-level executives, high-net-worth individuals, business owners, venture capitalists, and entrepreneurs. As an established personal financial planner, Stephen has delivered numerous presentations on financial, investment, retirement, and tax planning to corporations and professional groups. He has also written articles on investments, education, and estate planning. Before joining Sachetta, he co-founded and served as President of Wealth Management Advisors, LLC.