Receiving a financial windfall through an inheritance can trigger feelings of guilt and sadness that come as a result of losing a loved one. After all, what you've been left with is so much more than a number. It's a lasting legacy, and the kind of generosity that can feel overwhelming. You want to remember what the person meant to you — and not waste what they worked so hard to leave behind.

Used well, a large windfall can wipe out high-interest debt, build an emergency fund, or boost your retirement savings contributions. Used frivolously, it can disappear as fast as it arrived. The recent U.S. Health and Retirement Study shows that 42% of heirs spent their entire inheritance within one year.

New Morning Consult-Kiplinger research shows that adult children are far less likely to think they'll be getting an inheritance than parents who expect to leave one. In fact, 42% of younger respondents say they don't expect to receive a sizable amount. However, about twice as many parents do plan on leaving a meaningful inheritance.

That’s encouraging, given that 60% to 65% of Americans live paycheck to paycheck, according to a Wealthvieu survey, and another 56% can’t cover a $1,000 emergency. So if $100,000 showed up in your bank account, it would probably feel like a lot of money.

If you’re expecting a windfall or you’ve already received a large inheritance, here’s a guide to set up your financial future so the money lasts, instead of disappearing in the first year.

Take time to breathe

According to Capital Group, two-thirds (65%) of Gen Xers and Millennials say they regret how they used their inheritance money, with nearly two in five wishing they had invested more. While only 18% of millennials turned to financial advisers for investment advice, 27% were more likely to turn to social media and ‘finfluencers’ for advice when they inherit.

Srbuhi Avetisyan, a research and analytics specialist at Owner. One, offers this advice. "Don't rush to make the money productive. Give yourself permission to do nothing with it for a while. An inheritance is unusual money because it arrives together with emotion." She says that depending on the circumstances, there can be grief, relief, guilt and a strange sense that you need to "do something sensible" immediately. "That's not a great state in which to make a $100,000 decision."

If you receive the $100,000 in cash, consider putting it in an FDIC-insured high-yield savings account or money-market fund and leaving it there while you figure out what you want to do with it longer term. Then give yourself time to breathe. You don’t have to rush into any decisions. Coping with grief isn't easy, and adding $100,000 to the mix can only complicate matters.

Don’t treat a promise like a payday

Planning ahead is a sound strategy in many situations. But when it comes to an inheritance, making plans for how you'll spend the money before it lands in your bank account can be reckless. Wait until you know what you have and then incorporate the funds into your retirement plans.

While you may be anticipating a certain amount, remember that circumstances for the person leaving you the money can change, and so can the inheritance. Your friend or relative may need to go into a nursing home or an expensive long-term care facility, or they may decide to give all of their money away to their favorite charity instead and leave you with a future you cannot guarantee.

Even Thomas Jefferson said, “Never spend your money before you have it.” Talk with an inheritance planning advisor who can help you decide the best way to handle the money in the short term, as well as help devise a long-term financial plan that takes all of your assets and obligations into consideration.

Focus on debt reduction first

Paying down debt with an inheritance isn’t the most exciting first move, but it is one of the most valuable. Credit cards can carry an interest rate of 20% or more, which can eat away at even the largest inheritance. So, paying off high balances is a guaranteed return on your money. It also frees up cash flow and makes it easier to save or invest the rest of the inheritance. Paying off student loans or your home mortgage may also help, especially if your goal is to be debt-free.

Consider investing the money

With the help of a financial planner, you might want to invest the money from your inheritance. Diversify your investments across different options with varying risk levels, depending on how knowledgeable (and risk-tolerant) you are. Rather than investing it all at once, consider investing over time, using a strategy like value or dollar-cost averaging.

Boost your contributions

An inheritance can also provide an opportunity to boost your contributions to a 529 college savings plan account or retirement accounts, such as a 401(k) or IRA. You can’t put inherited money in a retirement account because it isn't earned income or other taxable compensation. However, knowing you have it can give you the comfort needed to boost your contributions.

Take more out of each paycheck for your 401(k). Your take-home pay will be less, but now you can use the inheritance money in your bank account to cover your expenses, like rent, groceries, and bills that your paycheck used to cover. You’ll have the same lifestyle, but you’ll also have more money in your 401(k) for retirement. You can put $24,500 in a 401(k), and even more if you’re 50 or older.

You can also put $7,500 in an IRA. If you have a qualifying high-deductible health plan, you can put $4,400 in an HSA for yourself or $8,750 for your family. Those accounts do accept a check or a transfer, so inheritance cash can go in directly, as long as you stay under the yearly limits. Or, choose a Roth IRA if you think your tax rate will be higher in the future.

Understand the tax implications

Unless you inherit a great deal of money, you probably won't have to worry about federal estate taxes ($15 million per individual or $30 million for a married couple in 2026).

However, certain assets do have tax implications. For example, if you inherit securities, jot down what they were worth on the day that the person you inherited them from died. You’ll need to know your cost basis if you decide to sell them.

The tax rules for individual retirement accounts (IRAs) vary depending on whether you inherited them from your spouse or someone else. The type of IRA, traditional or Roth, also matters. You won't owe tax on the amount you inherit, but you will be taxed when you take distributions from a traditional IRA. With Roth IRAs, withdrawals are typically tax-free, but you're generally required to drain the account within five years.

Enjoy your inheritance

If you want to spend some of your $100,000 inheritance on yourself or your loved ones, go ahead. After all, the money is yours now. Just remember, when it's gone, it's gone.

Jason Stephens, Founder and Managing Partner of Evertern Wealth, recently worked with a client who inherited about $150,000 from a grandparent. “They used part of it to take their first trip to Europe, paid off their student loans, and invested the rest," he said. "That was a thoughtful use of the money. They enjoyed a meaningful experience, eliminated debt, and still directed a substantial portion toward long-term financial security.”

Stephens says there is nothing wrong with enjoying part of an inheritance. The mistake is letting a meaningful financial opportunity disappear through a series of purchases without ever deciding what the money is intended to accomplish.

If you're reasonably secure financially and have been putting off repairs on your leaky roof, or have a medical emergency, that inheritance will come in handy. However, if you're up to your knees in debt, it might be better to focus on setting yourself up for a future no one can predict.

What a $100,000 inheritance can mean

If you receive a $100,000 inheritance, first, be grateful; it can make a positive difference in your life. Stephens recommends taking a few months to understand what you received, the tax implications, and what you want the money to accomplish. “That’s often more valuable than rushing to invest or spend it.”

"An inheritance can honor both sides of what the person who built the wealth likely wanted," he said. "They wanted you to enjoy some of what they worked so hard to create, and they wanted your life to be more financially secure. Good planning accomplishes both.”

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More than 32,000 Americans now hold $10 million or more in tax-advantaged accounts, with more than 1,000 holding balances above $25 million, according to Joint Committee on Taxation data.

These balances rarely stem from routine contributions to broad index funds. Typically, they trace back to startup founders, venture capitalists and corporate insiders placing low-cost, early-stage equity into self-directed IRAs and watching valuations compound over decades inside a tax-shielded wrapper.

Building that level of wealth is a remarkable achievement. Protecting it across generations, however, presents an entirely different planning challenge.

Mega-retirement accounts face growing scrutiny in Washington. Legislative proposals in the past decade have sought to cap total retirement balances or enforce mandatory distributions once balances surpass $10 million.

In today's dynamic tax landscape, affluent families must ask: Is an IRA still the optimal vehicle for long-term growth assets?

The traditional IRA drag: Ordinary income vs capital gains

Traditional IRAs deliver upfront deductions and tax-deferred growth, but every distribution is taxed as ordinary income — up to 37% federally, plus state taxes.

For rapidly appreciating equity, this dynamic creates a significant tax drag. Gains that would otherwise qualify for long-term capital gains rates (capped at 20% plus the 3.8% net investment income tax) lose their tax character entirely inside a traditional IRA. Decades of growth convert into ordinary income upon withdrawal.

The ordinary income vs capital gains tradeoff deepens for heirs. Under the SECURE Act, most nonspouse beneficiaries must fully distribute an inherited IRA within 10 years. A $20 million traditional IRA forced out over a decade can push beneficiaries into top tax brackets every year, surrendering nearly half the account to tax obligations.

The Roth trap: Income tax free, estate tax exposed

Roth accounts offer tax-free distributions and no lifetime required minimum distributions (RMDs), making them a natural candidate for high-upside equities. Yet, an often-overlooked exposure remains: The full Roth balance remains inside the owner's gross taxable estate at death.

Consider an entrepreneur seeding a Roth account with early-stage equity that grows to $50 million. While heirs receive an income tax-free windfall, they might face a substantial estate tax bill on the balance above the federal exemption limit ($15 million per person).

Another strategy is to withdraw from mega-Roth accounts after age 59½ and gift those funds — either directly or via trust structures. This approach can rapidly exhaust lifetime gift tax exemptions, restricting broader estate options.

Estate planning alternatives: Irrevocable trusts

To insulate high-growth assets from systemic tax drag and estate expansion, families expecting their wealth to trend above the federal estate tax exemption amount often look beyond retirement accounts toward irrevocable trust structures.

One has the choice of paying the trust's taxes over time by using a grantor trust. Because the grantor pays the annual income tax on behalf of the trust, the assets inside compound tax-free without diminishing the trust, principally providing a tax-free gift to beneficiaries each year.

To avoid paying the taxes of the irrevocable trust, the grantor might use a non-grantor trust in which the trust pays its own taxes. The grantor might "turn off" the grantor's trust status to convert the trust into a non-grantor trust.

Grantor trusts can be structured to allow indirect access to trust funds in more than one way. An independent trustee can be granted discretion to make distributions to beneficiaries based on health, education, maintenance or support needs, offering flexibility without giving the grantor direct control.

For married grantors, a spousal lifetime access trust (SLAT) provides a more direct route: It permits actual distributions to a spouse, who might then informally share that benefit with the grantor.

A non-grantor variation, the SLANT, can achieve similar goals, often for state income tax purposes. Because retaining a swap power would convert the trust back to grantor status, SLANT distributions rely more heavily on independent trustee discretion, which calls for more careful drafting.

While legislative discussions periodically evaluate changes to grantor trust rules, these vehicles remain primary pillars for intergenerational wealth transfer when executed with careful legal oversight.

Strategic asset placement across vehicles

Optimizing a complex wealth structure requires matching specific asset classes to the appropriate legal and tax wrappers. Note that these are general frameworks; the right approach for any given family will depend on their specific asset profile, complexity and risk tolerance.

• Traditional IRAs. Often best allocated to steady, yield-generating assets such as private credit or real estate investment trusts (REITs), where ordinary income tax rates match the income profile of the asset.
• Roth IRAs. Highly effective for strong growth equities, provided total household wealth remains within long-term estate tax exemption thresholds.
• Irrevocable grantor trusts. Ideal for high-upside, early-stage positions once family wealth exceeds federal estate tax thresholds, shielding future growth from federal estate tax.
• Taxable portfolios. Well-suited for core appreciated assets intended for transfer at death, leveraging the step-up in basis to eliminate unrealized capital gains. For concentrated, highly appreciated positions held prior to death, structured hedging and derivative strategies can help manage concentration risk, while other diversification tools such as direct indexing can allow for a more gradual transition out of the position.

Preserving generational wealth requires thoughtful vehicle selection, proactive risk management and staying ahead of changing tax frameworks. As balances grow, revisiting where assets sit, and why, can be one of the more overlooked ways to preserve wealth across generations.

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Your inheritance will likely be very different from your parents'. Two forces are at play. First, as life expectancies lengthen, the next generation is receiving inheritances much later in life. Second, the amount of wealth changing hands is staggering: Trillions of dollars will be passed down as part of the Great Wealth Transfer.

People inheriting money in their 30s or 40s might use those funds to buy a home or pay for their children's college. But those receiving inheritances in their 50s and 60s are using that money differently. For many, this windfall triggers a "second retirement" — an unexpected phase of financial freedom that allows them to completely rewrite their timeline.

Here's how experts recommend maximizing a late-in-life inheritance.

Buying back time

Well-off people are often advised to give with warm hands (while they are still alive) for a reason. Financial gifts for children during their 20s, 30s, or 40s can often be more "helpful" than receiving that money later.

Joshua Mangoubi, founder and chief investment officer at Considerate Capital Wealth Management, is familiar with that scenario. But he also says the narrative is shifting.

"What I usually hear is some version of, 'Man, I could have used this in 1998.' I get it. I would have said the same thing. Give it a few months, though, and the 1998 comment stops coming up," he says.

As Mangoubi explains, "At 35, the money buys stuff. At 60, you already own the stuff. Most of the 60-year-olds I work with are trying to get rid of stuff, not buy more. So what does the money buy now? Time."

What makes a late-in-life inheritance even more valuable, Mangoubi says, is that many older people know what they want to do with their time, whether it’s seeing their grandchildren more often, exploring hobbies, or traveling. And that’s something it’s hard to put a price tag on.

Paying for long-term care

On the flipside, Mangoubi says, a lot of people who receive an inheritance later end up using it to pay for a surviving parent’s long-term care.

"Long-term care insurance has an ugly math problem," Mangoubi says. "The people who can self-fund their care don't need it, and the people who need it can't afford it."

Given the way medical costs keep climbing, Mangoubi isn’t surprised by this trend. According to CareScout, the median cost of an annual assisted living stay was $74,400 and a private room in a nursing home was almost $130,000 annually, as of 2025.

While covering long-term care isn’t the most fun way to use an inheritance, it can at least alleviate an otherwise huge financial burden. Plus, recipients of an inheritance who don’t have their own long-term care plan can use the money to fund one.

Helping children and grandchildren

By the time many people reach their 50s or 60s, they’ve saved well and are still in their peak earning years. As such, they don’t necessarily have a great use for an inheritance. In these situations, recipients will often use the money to better the lives of their kids and, if applicable, grandkids, says Brandon M. Cox, CFP and founder of Coastline Complete Wealth.

"I also see people who inherit in their 50s and 60s realize they already have enough for themselves and start gifting money to their children or grandchildren. In that sense, some late-life inheritances almost skip a generation economically, even if they don’t legally," he explains.

Cox has also observed an interesting trend.

"I’d say more than half of the people I work with who receive a substantial inheritance want to keep all of it in their own bloodline," he says. "Their children become the beneficiaries of those inherited assets instead of their spouse, even in happy first marriages."

Retiring earlier than planned

While older beneficiaries of an inheritance may not "need" the money, it can often be a catalyst for early retirement, Cox says.

"We generally build retirement plans as if an inheritance isn’t coming," he explains. "Once it actually arrives, though, you can see people realize pretty quickly how different their financial picture is."

Cox shares that he once had a client with a successful pharmaceutical sales career who was making good money, but her inheritance let her retire earlier than she otherwise would have.

This phenomenon often acts as a "second retirement," where an unexpected late-in-life windfall allows someone to abandon their primary career trajectory and immediately enter a new phase of absolute financial independence.

"Once you know you don’t have to work anymore, that starts weighing on you pretty heavily when you’re having a bad day at work," he insists.

Patrick Simasko, elder law attorney and financial adviser at Simasko Law, has also seen late-in-life inheritances fuel earlier retirements than planned.

"Kids seem to want to retire earlier than their parents. They saw their parents work and never took advantage of their savings. The kids want to start their retirement as early as possible," he says.

Buying more financial security

In Simasko’s experience, many of his clients who receive a late-in-life inheritance are already in a strong position to retire comfortably. But that extra money, he says, can buy more financial security.

"There has been a major shift away from traditional pensions," Simasko explains. "For a 55- or 60-year-old who may not have a pension of their own, an inherited IRA or other retirement assets can substantially strengthen their retirement picture. In many cases, the inheritance isn't about buying something new — it's about providing greater security, flexibility, and freedom during retirement."

Pivoting to meaningful work

Some people may not be ready to retire in their 50s or 60s, despite being able to do so following a sizable inheritance. Allison Moeschberger, CFP and VP wealth adviser at Johnson Financial Group, says she’s seen clients use their excess income later in life to adapt their careers rather than ditch them.

"Working because you feel you have to is very different than working because you want to," Moeschberger says. "An inheritance can allow them to retire early, move to part-time, switch careers to try something new, or move from a paying job to volunteering."

Moeschberger shares a few stories of meaningful pivots.

"One client left their demanding job as an attorney and became a substitute teacher so they had the choice of working when they wanted to," she says. "Another stepped down from running a business to become a bartender at their local brewery because they already enjoyed going there as a customer and still wanted to be able to interact with people and have interesting conversations."

Funding family memories

You may not need more stuff if you inherit money in your 50s or 60s. But you can use that money to buy experiences, Moeschberger says.

"One of the best parts of being a wealth adviser is watching clients experience the things they dreamed of or wanted to do but thought would never be possible for them," she says. "Mediterranean cruises, real estate purchases in a new location, and home additions are all examples I’ve seen."

Moeschberger also said one client of hers chose to invite their kids and grandkids on a big family trip as an experience they would all appreciate and remember. And that’s a wonderful way to honor a loved one, too.

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The Great Wealth Transfer is already underway, with trillions of dollars expected to pass from one generation to the next over the coming decades.

But most Americans spend more time planning a family vacation than working on their personal finances, and the amount of time they spend on their wealth transfer is even less.

In my experience, this oversight can have lasting consequences. Here are the biggest estate planning mistakes I try to help my clients avoid.

Not preparing your heirs

Wealth is a powerful tool for creating a legacy. But if you're assuming it will be a wonderful windfall that sets your family up for success after you die, you may be unpleasantly surprised. According to research from the Williams Group, 70% of wealthy families lose their wealth by the second generation, and 90% lose it by the third.

I've found that heirs are often better prepared for wealth when they develop accomplishments and confidence that are independent of family wealth. The goal isn't to make life difficult for your children, but to help them build the skills and judgment they'll need to manage opportunities responsibly.

Unfortunately, more than half of parents ages 55 and older surveyed by Morning Consult for Kiplinger say they rarely or never discuss money with their children.

That's why I encourage families to hold regular conversations about the purpose of their wealth. This doesn't have to mean disclosing every dollar. It's about helping the next generation understand how wealth was created, what responsibilities come with it and what role it should play in their lives.

The biggest gift you can leave for the next generation is clarity and financial confidence, and you can't do that if you don't talk to them.

You shouldn't be the only one talking to your children about money, however. It's hard to be a prophet in your own land, and one lesson I've learned as an adviser and parent is that children don't always take advice from those closest to them.

Sometimes they'll hear the exact same message from a trusted mentor, adviser or family friend and view it completely differently. Create opportunities for younger generations to learn from people who have good judgment and strong values.

Failing to formalize your plan

Legal processes need to be followed to ensure assets are transferred the way you want. It's always shocking to me how so few people have a will or trust. A Guardian study found that about half of high-net-worth individuals don't currently have a will.

I've seen estate disputes strain family relationships for years. In some cases, siblings stop speaking to one another because expectations were never clearly documented or communicated. If you've spent a lifetime building wealth, take the time to preserve family harmony by ensuring everyone understands your intentions before difficult questions arise.

Not protecting your wealth

A will or trust determines where assets go. Asset protection helps ensure they're still there when the time comes to transfer them. In this litigious world, asset protection is essential to protect people from lawsuit creditors and anyone else trying to separate you from your money.

Unexpected legal claims or liabilities could reduce the wealth you're hoping to pass on. I often tell clients they need a moat around their castle. I've seen many people's life's work wiped out by a judgment, regulatory issue or divorce.

Irrevocable trusts are a way to protect your assets. These types of trusts can shield your assets from lawsuits. Depending on your circumstances, they may also be able to lower your estate and income taxes.

Waiting until you're gone to make an impact

Many people assume wealth transfer is something that happens after they die. In reality, some of the most meaningful transfers happen while you're still alive to experience the benefits firsthand.

I've seen such joy in parents and grandparents when they get to see how their money benefits their offspring. It's also incredible to be so fortunate that you can give your money to places and causes you believe in and be able to see its impact while you're alive. This is why I encourage some of my clients to not wait until they're gone to give.

People are living longer these days. If you're 99 when you pass, your kids may be in their 70s and already retired. But in their 30s, 40s and 50s, your kids may be starting families, buying houses, building businesses and putting their kids through school. Transferring money at this point can provide far greater value.

Focusing on the "how" before the "who"

Everybody asks "how?" I think the better question is "who?"

• Who are the advisers helping you make estate planning decisions?
• Who is educating the next generation?
• Who is collaborating to help ensure every piece of your plan works together?

Transferring wealth requires a team, and the quality of your team determines the quality of your outcomes. I like to call this your "kitchen cabinet," meaning the group of people you trust enough to give you the right advice when you need it most.

You don't want five great professionals working independently. You want the right professionals working together. The families who navigate these transitions most successfully tend to have financial advisers, attorneys and tax professionals operating as a coordinated team.

Wealth transfer is about far more than passing down assets. It's about passing down opportunities, values and a vision for the future. With thoughtful planning, open communication and the right team of professionals guiding the process, your wealth can become a lasting legacy that benefits generations to come.

In my experience, the families that transfer wealth most successfully treat inheritance as a conversation, not an event.

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

The most dangerous word in American estate planning is "permanent."

Congress used it last summer when it enacted the One Big Beautiful Bill Act (OBBBA), and every planning practice in the country quietly lost its sense of urgency in the days that followed.

The relief was understandable. For much of the preceding three years, the profession had operated under a deadline: The doubled estate exemption in the Tax Cuts and Jobs Act (TCJA) was scheduled to sunset at the end of 2025, and families with substantial wealth were counseled — correctly, under the law at the time — to compress years of transfer planning into a matter of months.

Then the deadline evaporated — and with it, for many families, the last practical motivation to reopen the estate binder.

The deadline that never came

On July 4, 2025, President Donald Trump signed the OBBBA into effect, setting the estate, gift and generation-skipping transfer tax exemption at $15 million per individual for 2026, or $30 million for married couples — up from $13.99 million and $27.98 million, respectively, in 2025.

It also provides for inflation adjustments beginning in 2027 using 2025 as the base year. The top federal rate remains 40%.

The 2026 annual gift exclusion for 2026 is $19,000.

Since the OBBBA took effect, for the great majority of Americans with substantial wealth — households with net worth between roughly $5 million and $30 million — the federal estate tax has effectively receded as a planning concern.

Why 'permanent' is a dangerous word

"Permanent," in tax legislation, is a term of art. It signals that Congress has chosen not to include a scheduled expiration in the statute — nothing more.

A future Congress remains free to revise the number at any time, and the historical record suggests it does so with regularity.

In 2001, the federal estate tax exemption stood at $675,000. By 2002, it had risen to $1 million. In 2009, it reached $3.5 million. In 2010, the estate tax was briefly repealed altogether, then reinstated at $5 million in 2011.

The TCJA doubled that figure to $11.18 million in 2018, and it drifted upward with inflation being lifted it to its current level.

Against that record, "permanent" is a description of legislative posture, not of statutory reality.

The behavioral response most families adopt on hearing the word — read the news, exhale, close the binder — is precisely the wrong one.

Four questions your documents need to address now

1. Does your existing plan still function when the exemption rises rather than falls?

Many trusts drafted during the preceding decade contain formula clauses — provisions that automatically allocate assets between a credit-shelter share and a marital share based on the exemption in effect at the first spouse's death.

A formula written to divide an estate at a $5 million or $7 million threshold behaves very differently at $15 million.

In some drafting patterns, the credit-shelter share now consumes nearly the entire estate and starves the surviving spouse's marital share. In others, the reverse occurs.

Neither outcome may reflect what the family intended when the documents were signed.

The remedy is unglamorous: Read the formula language, model the outcome under current law and amend or restate where the mechanics no longer serve the intent.

2. How should appreciated assets in your estate be handled?

This question inverts a decade of planning orthodoxy. Under the pre-OBBBA regime, the arithmetic favored removing appreciated assets from the estate — through gifts, sales to intentionally defective grantor trusts or grantor retained annuity trusts — to avoid a 40% estate tax that would otherwise apply.

That calculus was often correct. Under a permanent $30 million exemption, it frequently is not.

For families comfortably beneath the threshold, retaining appreciated assets in the estate captures the basis step-up permitted at death, which eliminates embedded capital gain from a lifetime of appreciation.

A 23.8% federal capital gains rate applied to decades of unrealized growth can now exceed the estate tax cost of holding the asset — often by a substantial margin.

The old default of "give it away" deserves a fresh calculation.

3. What impact will state estate or inheritance taxes have?

Several states levy their own estate tax at thresholds far below the federal exemptions, and additional jurisdictions impose inheritance tax on the recipient rather than the estate.

• Oregon begins taxation at $1 million
• Massachusetts at $2 million
• Washington at approximately $3 million
• New York at $7.35 million, with a distinctive cliff at 105% of exemption above which the entire estate becomes taxable from the first dollar

Our practice, Palmer Wealth Group, (I am the CEO), is based in Texas, which imposes no state estate tax, a genuine planning advantage for its residents.

But the analysis rarely stays clean. Property held in another state, family members domiciled elsewhere or a beneficiary residing in an inheritance tax jurisdiction can each trigger exposure the federal calculation misses entirely.

State thresholds change more frequently than federal, and several states index their exemptions annually. What was safe last year may not be safe this year.

4. Which trust strategies are the most tax-efficient?

This one addresses what existing trusts have quietly become. When federal estate tax was the binding constraint, the goal of an irrevocable trust was often to remove assets from the grantor's estate as efficiently as possible. Income taxation was a secondary concern. It is no longer.

Now, a trust reaches the top 37% federal income tax bracket at $16,000 of undistributed income in 2026 — a threshold a single individual does not encounter until $640,600 of taxable income.

For a trust with meaningful investment assets, the compression is severe.

Distributable net income planning, grantor-trust elections, situs selection and the choice between distributing and accumulating income each become materially more important once the estate tax rationale no longer overwhelms every other consideration.

What this review actually looks like

Taken together, these four questions form the shape of an estate plan review that has these components:

• Documentary. Retrieve the current trust and will documents and read the formula clauses aloud. The exercise is more revealing than most families expect.
• Arithmetic. Re-inventory the estate against the new estate tax threshold, separating what remains a candidate for lifetime transfer from what has quietly become a candidate for basis step-up.
• Geographic. identify every state in which the family owns real property, maintains a domicile or has significant beneficiaries and map the exposure against current state statutes.

The fourth component is coordinative — and, in some respects, it's the most difficult because estate planning, tax planning and investment management sit on three separate professional desks, plus a personal one:

• The attorney drafts the documents
• The accountant computes the return
• The adviser manages the assets
• The family too often serves as the unpaid coordinator among them

In our practice, the review typically begins with the attorney reading the formula clauses in the family's presence and ends with the accountant and the investment adviser at the same table, working from the same current inventory.

The mechanics are ordinary; the coordination is not. Its absence — not the tax code — is what most often causes an updated plan to remain uncompleted after the review begins.

Nothing in the current law prevents a future Congress from changing the exemption again. The 40% rate, the state estate tax landscape and the compressed income tax brackets that apply to trusts all remain what they were before OBBBA.

What has changed is the immediacy of the pressure to act. That change is welcome, but it should not be mistaken for a change in the underlying discipline.

Estate planning is not the practice of racing deadlines. It is the practice of building a plan that survives whatever the rules become next.

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

It’s perfectly natural to want your children to be well cared for after you’re gone. It’s also natural to wonder if they can manage an inheritance with the same care it took to build. After all, loving your children and trusting them with a large windfall are not the same thing.

An outright bequest can overwhelm a child who has never managed a large sum of money — much less a family business or other complex assets. A spendthrift trust, on the other hand, allows you to provide for them without dropping a huge lump sum into their checking account all at once.

What a spendthrift trust actually does

The name "spendthrift" comes from an English term for someone who is extravagant and recklessly wasteful with money. A spendthrift trust, an often-misunderstood estate-planning tool, lets you provide for your loved ones while protecting your legacy from poor decisions and creditors. Unlike a regular trust that lets you hand over assets, money or property all at once, a spendthrift trust rations money gradually according to its terms. That’s because the trust — not your children or other beneficiaries — owns the assets.

The trustee manages the spendthrift trust, deciding when, how much, and for what purpose funds are distributed according to your set terms. Your child does not have a right to demand a lump sum, to use the trust as collateral for a loan, or to pay a creditor. Sometimes this can be misconstrued as a vote of no confidence. However, if explained well, it is actually just the opposite, as this type of trust can help support your loved ones for decades when structured properly.

The risks of an outright inheritance

Over the next 25 years, trillions in U.S. personal assets will change hands in what’s known as the Great Wealth Transfer. The scale of that alone can make you feel a little uneasy about your kids’ finances after you’re gone.

Research by Morning Consult, in partnership with Kiplinger, shows why that uneasiness is so common: families often aren’t on the same page. Nearly twice as many parents expect to leave a meaningful inheritance (46%) as adult children who expect to receive one (23%). The same survey found that 11% of parents also worry their children won’t handle an inheritance responsibly.

With an outright inheritance, money and assets transfer directly to your beneficiaries without restrictions. That gives them full control over the inherited assets immediately upon your death and can expose those assets to risks that you never intended, especially if the beneficiary isn’t prepared. It’s not unusual that a lump-sum inheritance disappears faster than it arrived. The value of a spendthrift trust is that it can protect your heirs not just from creditors or lawsuits, but sometimes from their own financial mismanagement.

Who is a spendthrift trust for?

Spendthrift trusts are especially useful for beneficiaries who:

• Are young or financially immature, such as a teenager or a grandchild.
• Have special needs and/or receive government benefits.
• Have mounds of high-interest debt.
• Might be facing a divorce.
• Have a history of poor money management.
• May struggle with gambling or other addiction.
• Works in a profession with a high risk of lawsuits, such as doctors, lawyers and business owners.
• Is at risk of financial scams or exploitation.

When creditors can access trust assets

Spendthrift protection is not airtight. Even in states with clear statutes, courts may still allow creditors to access assets despite the spendthrift provision. For instance:

• Child support and alimony. Most states treat child support and alimony obligations as exceptions to spendthrift protection. A former spouse or child owed support can often compel a court to order distributions or wage garnishment.
• Basic needs providers. Some states allow creditors who provide beneficiaries with necessities, such as food, shelter or medical care, to file a claim against trust assets.
• Federal government claims. Federal tax debts and certain other federal obligations, such as defaulted federal student loans, may override a state's spendthrift protections.
• Tort victims. Some states allow victims of the beneficiary's intentional wrongdoing to obtain trust assets.

The specific exceptions depend entirely on your state's law, and a spendthrift provision that works well in one state may offer fewer protections in another state. Keep in mind, too, that the protection covers only those assets held inside the trust. Once you distribute the assets to your beneficiaries, they become the beneficiaries' property and ordinary creditor rules apply.

How to write the trust so it actually works

Creating a spendthrift trust is similar to creating any other trust, and the spendthrift clause itself can be relatively short. Under the Uniform Trust Code, saying the beneficiary’s interest is held “subject to a spendthrift trust” is often enough. However, you may choose to add provisions and conditions that let you decide when and how much to distribute to the beneficiary.

For example, you may add a provision that restricts how much your beneficiary can access each year. Or, you might add a condition that limits how your beneficiary can spend the money.

"Let’s say you are providing a $200,000 inheritance for your two children. You have one child who isn’t especially careful with money and the other is," says Oliver Kevin Morrisey, inheritance and estate lawyer at Empower Probate Lawyers. "You don’t split $200,000 equally. For the impulse spender, you might include a provision in the trust that pays $2,000 per month and can be used only for rent, education or healthcare. The other child can receive the $200,000 outright."

However, states have different rules about what you can and can’t stipulate in a spendthrift provision. Scott Jones, founder & financial advisor of Genesis Wealth Advisor Group, LLC, says, "In many states, an inheritance can be reached by creditors the moment it lands in the beneficiary's name, so the money mom and dad worked forty years to save can be gone before the beneficiary sees any of it."

That’s why it’s wise to consult with an estate planning attorney to ensure you’re following your state’s rules concerning the spendthrift provision.

Remember that a spendthrift clause may be overkill if your children or other beneficiaries are financially mature and stable, you have a modest estate, or you have no concerns about excessive spending or possible claims from creditors. A revocable living trust that becomes irrevocable at your death, with a spendthrift clause included, is often enough for many families.

How to choose a trustee

Choosing the right trustee for a spendthrift trust matters. You can choose a family member, a good friend, a bank or a trust company. Family members likely know your needs best, but a professional trustee with no emotional attachment can offer an objective third-party perspective. No matter who you pick, be sure the trustee is knowledgeable about financial matters because this person will distribute funds, protect assets, and ensure your beneficiaries use the money as you intended.

Pros and cons of a spendthrift trust

A spendthrift trust is one way to tell your beneficiaries you love them enough to protect the inheritance you built from impulsive spending or financial mismanagement that has nothing to do with whether or not they are "good kids." Instead, it is your way to help ensure their long-term financial security.

But keep in mind the drawbacks. Your beneficiaries have limited access to their inheritance, which can be frustrating in an emergency. And since the trust relies entirely on the trustee for distributions, disagreements may occur. Roughly 33% of adult children expect an inheritance will create conflict with their siblings, according to the Kiplinger-Money Consult survey. With that in mind, the best way to prevent arguments among your children is to take the first step. It’s never too early to start talking about your kids' finances.

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You just got a $1 million inheritance in the Great Wealth Transfer and don't know what to do? You're not alone. Millions of people are poised to receive a piece of the more than $124 trillion in generational wealth expected to be transferred over the next decades.

While an inheritance of that size can be life-changing, it can also cause undue strife. With a windfall come taxes, estate administration fees and investment decisions.

"Most people, when they receive an inheritance, want to spend it," said Tim McGrath, a managing partner at Riverpoint Wealth Management. "If they don't make the right decisions, it could hurt them over the long haul rather than help them."

Let's say you buy a big house that you can't afford or make risky investments — you could end up in debt or homeless because of the inheritance.

The good news is there are easy ways to protect your newfound wealth. From where to initially park your cash to how to grow it, here's how.

First, figure out what the inheritance means to you

Receiving $1 million can be a big deal. It could mean you're debt-free, your kids' education is paid for, or your retirement is in the bag, or it mightmean something completely different. Either way, McGrath says the first thing you should do is determine what it means for your goals and finances.

"For most people, $1 million is life-changing," says McGrath.

While you consider how to use your newfound wealth, don't keep the money under a mattress. Put it in a high-yield savings account or, if you already have one, an investment account.

"In today's environment, you can still find money markets or high-yield savings accounts paying 3% to 4%, so parking it there to make a little interest while you determine how to proceed is a simple way to get started," says Kassi Hyde, a financial adviser with Apollon Wealth Management. "If you know you don't need or want to touch the money and want it to grow for future needs, then definitely go ahead and invest. Just make sure to consider your time horizon when determining how risky you want to be."

If you don't have a financial adviser, now is the time to find one. Our How to Find a Financial Adviser guide will help you select one that matches your personality and budget.

Pay down high-interest debt

Even if you know how you want to use the inheritance, financial advisers say to pay off any high-interest debt first. That could include credit cards, personal loans and retail cards that charge you double-digit interest. The idea is to get yourself into a cash-flow positive position first, says McGrath.

Put the money to work while you wait to use it

Maybe you plan to buy a new house in a couple of years, pay for your kids' college in the future or save it for retirement. Whatever the goal, it's important to put your inheritance to work while you wait. That's where an investment plan comes into play. The type of inheritance dictates how you can invest it.

Develop a tax strategy

You need to be mindful of the tax portion of your inheritance, but how much is taxed depends on the asset. The lifetime federal estate tax exemption — $15 million for individuals and $30 million for couples in 2026 — pretty much guarantees most recipients won't owe federal estate taxes on their inheritance.

Depending on where the person who left you an inheritance lived, you might face state estate taxes. State tax exemptions are typically lower than the federal exemption. For example, Massachusetts exempts up to $2 million.

If the asset generates capital gains after it's passed on, you'll owe taxes. "If you inherit an investment worth $500 and the value grows to $600 and you sell it, you have $100 in gains you will have to pay taxes on," said Hyde. The caveat to that capital gains rule is the "step-up in basis," which resets an asset's original value to its market value on the date of the original owner's death.

You'll also owe taxes (as ordinary income, potentially bumping you up to a higher tax bracket) if you inherited a traditional IRA or 401(k) and you aren't a spouse.

You might wish to consult a professional tax expert if your inheritance is complex or you don't understand your options.

Stick to the plan

A $1 million inheritance offers rare financial freedom, but only if you manage it wisely. By tackling debt first, planning for taxes and putting the rest to work, you can turn a one-time inheritance into generational wealth. Once you create a plan for that money, stick to it, and don't be afraid to ask an expert for guidance along the way.

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Everyone's heard a horror story.

The adult children who no longer speak to each other after a blow-up over who would get Mom's engagement ring when she died. The constant arguments between siblings over the family vacation house they jointly inherited. The simmering resentment between adult kids after a parent's will revealed an uneven split of assets among them — tension that eventually boiled over, causing the siblings to sever their relationship and cut off their children, once-close cousins, from seeing each other as well.

These are heartbreaking scenarios that many parents worry about and try to avoid in their estate planning. And many adult children share their concern: One-third of adult kids expect an inheritance to create conflict with their siblings, according to a national survey commissioned by Kiplinger and conducted by the research firm Morning Consult.

Studies, unfortunately, show their concern is justified. Research from Cornell University indicates that among the 27% of Americans who are estranged from a family member, disputes over an inheritance are a leading trigger and frequently involve siblings.

Similarly, an Ameriprise study found that when adult siblings report money conflicts, nearly 70% of those arguments involve their parents, and inheritance was the top cause of those disputes.

Inheritance conflicts are rarely only or even primarily about money, experts say. "Sibling disputes over estates and wills almost always surface in the context of older, unresolved grievances, typically about parental favoritism and unequal treatment, so money becomes a scorecard for perceived favoritism or slights over a lifetime," says Karl Pillemer, a professor of human development at Cornell University and author of Fault Lines: Fractured Families and How to Mend Them.

Adding fuel to the fire: The transfer of a parent’s assets occurs at a time of grief, when emotions are already running high. And in many families, there has been no prior conversation about how Mom and Dad intend to pass on their wealth, so adult children are forced to draw their own conclusions — and they often fill in the blanks with negative implications, experts say.

"Grief mixed with urgency and ambiguity is a tough combination," says Elisa Shevlin Rizzo, head of family advisory at J.P. Morgan Private Bank.

The amounts at stake rarely matter. "Disputes can happen when the only assets involved are Mom’s china and jewelry, and they can happen when there’s millions of dollars at stake," says Monique Lavender Greenberg, managing partner of the law firm Lavender Greenberg in Miami and a board director of the National Association of Estate Planners & Councils.

"No one wants their legacy to be that their kids end up hating each other. We want our families to continue to love each other, but that takes thought and planning."

Want to ensure your wealth passes as you intend and your children are still speaking to each other after you’re gone? Experts suggest these steps.

Figure out what's truly fair.

The default for most parents is to split the assets they’re leaving to the kids equally. But many adult children don’t feel that’s a fair division.

In the Kiplinger-Morning Consult survey, for instance, 71% of parents said they intend to leave the same amount to each of their kids, but just 50% of adult children preferred that approach. That 21-point gap was filled by siblings who believe Mom and Dad should base inheritance decisions on each child’s financial situation and need, or on factors such as how much financial help parents have given each child in the past and how much the kids assisted their mother and father during their lifetimes.

"Equal means the same for everyone, while fair means each person gets what they deserve or need," says Pillemer. "Sometimes those two norms pull in opposite directions inside families."

Both perspectives are valid. "An even split is completely understandable if you’re a parent who wants to avoid inserting a new conflict into the sibling dynamic and to communicate that you love all your children equally," says Matthew Willner, a therapist who specializes in family conflict and estrangement, including adult sibling conflicts and inheritance disputes.

"But if one child has been struggling financially for years, an even split can feel emotionally like their needs don’t matter or aren’t recognized. And if you’re, say, a daughter who has been a caregiver for Mom or Dad for several years and there’s an even split, it can read to you as if everything you did counted for nothing."

On the other hand, an unequal division, especially if it’s unexplained, can be even more hurtful and trigger long-lasting rivalries and tensions between siblings.

"If I’m the child who received less and I already feel like my mom and dad loved my brother more, that’s going to be a real hard nut to swallow, even if they helped me more financially when they were alive," says Rizzo. "Even if I’m a hedge-fund manager and my brother works at a nonprofit making $40,000 a year, getting less is hard emotionally — even if I know intellectually it makes sense."

There is typically no right or wrong decision on splitting assets, experts say, and parents are entitled to pass down their wealth however they see fit. What’s imperative, though, is that you’re thoughtful about your process and choices, and then, crucially, that you inform your children of your decision and explain your reasoning.

It’s the element of surprise that can do the greatest damage, experts say.

"The very thing that would prevent sibling conflicts or at least lower their temperature — having an honest conversation about how parents have decided to pass on wealth and why — is the step many families skip because it can be uncomfortable and bring up old wounds no one wants to deal with," says Willner.

He suggests talking to all of the children together, if possible, as that lessens the possibility of one sibling accusing another of manipulating or pressuring their parents, especially if you’ve decided on an uneven split. It also gives the kids a chance to voice their emotions and concerns; feeling heard can make it easier to accept the parents’ decision.

"If the children know what’s going to happen and why, they typically suck it up and honor your wishes," says Greenberg. "And if the kids are going to be mad, they’ll be mad at Mom and Dad, not each other."

You can also pursue ways to reward an adult child who has helped out a lot, provide more to one who needs extra financial help, or balance the scales on past financial gifts to another that avoid a hurtful uneven division of assets in your will. You might, for example, make a caregiver child the beneficiary of a small life insurance policy or give more money during your lifetime to the child working at the nonprofit than to the one who is a hedge-fund manager.

The important thing is that none of your plans live in the dark. Says Sharon Olson, managing principal of Olson Wealth Group, "We spend enormous amounts of time preparing the money for the children. We need to spend just as much time preparing the children for the money."

Read more: Why Leaving an Equal Inheritance to Your Children Could Backfire

Take particular care with tricky assets.

Ironically, the part of your estate that’s least likely to trigger a blow-up among your kids may be your most valuable holdings, in dollar terms: Cash savings and liquid investments, such as stocks, bonds and funds. Far more fraught are assets that can’t be easily or neatly divided, such as a parent’s home, a vacation property or a family business.

Take the family lake house, for example — an asset with both monetary and sentimental value, perhaps tied to happy memories of summers together by the water. Maybe the siblings want to keep it in the family and share it, but one cannot afford the upkeep. Or maybe one sibling prefers to sell, but the other siblings don’t have the cash to buy them out.

"Parents often leave property to their children and say, ‘They’ll figure it out when I’m gone,’" says Rizzo. "That’s one of the most damaging attitudes out there. If you want to set your kids up for future conflict, let them figure it out when you’re gone."

A family business can be especially problematic, particularly if one or more siblings had jobs at the company and others didn’t. "The daughter who worked there for 25 years may say, ‘I helped Dad build this business and I deserve it.’ Her brother may say, ‘I understand that, but he was my father too, and I also deserve a share.’ Both can be right," says Olson.

To head off trouble, she suggests parents identify potentially thorny assets and establish valuation and buyout provisions as part of estate planning. If multiple children will own a vacation home, determine how expenses, property use and eventual sale will work. "Don’t leave the children a complicated asset and unanswered questions," Olson says.

To the extent that you can, solve potential problems in advance. You might, for example, put the house in Nantucket in a trust with enough financial assets to cover the expenses, if the estate can afford it, Rizzo suggests.

Or, if an estate lacks cash, buying life insurance might be helpful. That way the child who wants the beach house gets it, or the family business passes to the kid who works there, and the other child is the beneficiary of the insurance policy and receives an asset of comparable value, says Carly Doshi, head of family advisory planning and trust services at Flagstar Bank and chair of the New York branch of the Society of Trust and Estate Practitioners.

Be careful to communicate your intentions, including for any accounts you own jointly with one of your children, to all of your offspring, experts say.

For example, you may have a joint checking account with right of survivorship with a son or daughter who helps you with bill-paying, and that will pass directly to them upon your death. If that’s what you want — say, to compensate that child for their help — let all of the kids know the plan. Or, if not, let them know you intend for that money to be split among them after you’re gone, document your wishes in writing in a letter of instruction, and consider retitling the account.

"One of the greatest gifts a parent can leave their children is clarity," says Doshi. "A thoughtful estate plan is really about removing as many reasons for conflict as possible."

Read more: What Happens to Your Savings Account When You Die?

Sweat the small stuff.

For one family, it was the red plate with hearts on it that said "You’re special," which Mom used to serve birthday cake for each child growing up. For another, it was a 25-cent Christmas ornament.

In yet another case, it was a piece of art, promised by the father to one kid and by the mother to another. Then there was the daughter-in-law found racing through the parents’ home after the funeral, switching masking-tape labels attached to various cherished items indicating which sibling was supposed to get what.

Estate and wealth-management experts are filled with stories of personal possessions, sometimes valuable but often not, that triggered big fights among siblings after a parent’s death, sometimes resulting in a permanent rift.

"Objects are often more contentious than money — not just because it’s hard to divide a holiday ornament or a plate, but because those kinds of items hold more memories and meaning for people," says Sara Croymans, an educator with the University of Minnesota Extension who helps facilitate its Who Gets Grandma’s Yellow Pie Plate? program, which teaches research-based practical strategies for passing on personal possessions.

Croymans suggests parents take a poll of their adult children to find out what items they’re interested in and why. Don’t just assume, for instance, that a son should get the tools and a daughter her mom’s jewelry, she says. Parents should also share their views and plans for dividing possessions and the stories behind items that are particularly meaningful to them. That, in turn, might affect the kids’ preferences.

If more than one child wants the same item or items, try to land on a system together that feels fair for deciding who gets them, perhaps coming up with similar items that can be considered in tandem. Croymans recalls three sisters who had shared a baptismal gown, and each one wanted it for her own kids. The siblings averted an argument by identifying a confirmation gown and their mother’s wedding dress as things of similar emotional value, and each sister ended up with a garment that was meaningful to her.

"Research has found that if people buy into the process and believe it’s fair, they’ll support the outcome, even if they didn’t get the specific thing they wanted," says Croymans.

Experts recommend documenting your plan for personal possessions, naming names and specific objects, in a letter of instruction you keep with other estate-plan documents. Although the document is not legally binding, experts say it carries the weight of moral authority, and most siblings honor their parents’ plans.

Read more: The Great Junk Transfer: Why Heirs Want Meaning, Not More Stuff

Avoid the oldest-child syndrome.

Sometimes tensions build and boil over among siblings not over the inheritance itself but rather who is appointed to oversee the disposition of those assets. To avoid fights, parents often default to appointing their oldest child as executor or trustee or naming some or all of the children as co-managers — well-intentioned moves that experts say often backfire.

"The person who is most suited for the role is the best choice, and that should be the person who is organized, financially capable, communicative and, crucially, trusted by the other beneficiaries," says Doshi.

Whoever you pick, to minimize resentment or hurt feelings, be sure to communicate your decision to all of your children as well as your reasons — say, if the appointee has legal or financial skills or is recognized within the family as the peacemaker.

As for the team approach to executorship, experts are not fans. "Requiring all of your children to reach constant consensus, especially when everyone is grieving, can slow things down or even create conflict where there wasn’t any," says Doshi.

And if the kids don’t always get along? "If the siblings have never made decisions well together, requiring a consensus after a parent dies is planning for deadlock," Rizzo says.

The critical question parents don’t ask enough, Olson says, particularly when it comes to trusts: What will giving this child authority do to the sibling relationship? "Sometimes the most loving thing a parent can do is not put one child in the position of policing another," she says.

Alternatives to naming one or more of your children as executor or trustee include appointing another family member or close friend who is capable and willing to take on the responsibility, or hiring a professional fiduciary through, say, a bank or other financial institution. Or you can turn to an estate-planning attorney who offers these services (find one via the directory of The American College of Trust and Estate Counsel).

Read more: 6 Steps to Choosing an Executor

Get help before things blow up.

If you anticipate conflict between your children over their inheritance, or recognize it’s a possibility, you can also turn to professionals to mediate potentially thorny issues or just help get all the kids on the same page. Siblings can also seek outside help after a parent’s death, if issues around their bequests start to get contentious.

"Having a neutral third party in the room guiding the conversation can help mitigate some long-standing family feelings and tensions, and people tend to be more respectful and reasonable," says Joseph Kellogg, head of wealth planning for WE Family Offices in Miami.

Experts suggest parents consider building a procedure for mediation of disputes into estate-planning documents. (An estate-planning attorney or family wealth manager may be able to fill this role, or you can find a professional mediator in your locale using a tool such as Mediate.com’s practitioner directory.)

"That way everyone knows there’s a way out of disputes that attempts to be fair and objective," says Kellogg. "And it can motivate kids to go the extra mile in trying to work it out themselves, knowing that if they don’t, someone else will step in and do it for them."

Research from Karl Pillemer at Cornell, including interviews with about 300 people who had experienced family rifts, backs up the importance of seeking independent mediation if siblings are locked in a fight over their parents’ estate.

"When I asked family members who had a rift over inheritance what would have helped, they often said some version of, ‘I’d like a time machine, so we could go back and get outside help.’"

The good news, says Pillemer: Rifts over wills, inheritance and money are somewhat more likely to be repaired than ones that stem from systemic family problems, such as harsh parenting or extremely difficult childhoods — unless siblings reach a tipping point in which one says to the other, "I never want to see or speak to you again."

"When that occurs, it develops its own dynamic and is surprisingly hard to repair," says Pillemer. "Almost every estranged family I talked to wished they hadn’t drawn that line in the sand.

So do almost anything you can not to reach that cutoff point. Keep talking, be more understanding, seek mediation, get help from a therapist, apologize — even if you feel you shouldn’t have to — and, most especially, ask yourself, Is this really worth it?"

The price of destroying a family over money, he notes, is almost always too high, and it’s the next generation that pays. "If two siblings cut off contact over an inheritance, they don’t lose only each other; their children lose their cousins. Your kids will inherit not only your assets one day but also the estrangements that came with them."

That’s the opposite of the legacy most parents hope to leave. The way to prevent it, Pillemer and other experts say, is to talk with your children, communicate your intentions and the reasoning behind them clearly and early, and be open to your kids’ views and feelings in return.

He says, "That’s the single most important thing parents can do."

Read more: Kiplinger Conversations: How to Talk Inheritance With Your Kids

Special considerations for blended families.

Families in which one or both spouses have children from previous marriages are the most likely to experience disputes around estate plans, according to research from the Society of Trust and Estate Practitioners (STEP). Unequal treatment of siblings and conflicts between children and stepchildren were among the most-common points of friction, second only to disputes between children and a surviving parent or stepparent.

"The core problem is that remarriage creates competing loyalties and competing claims, which can be difficult to resolve in a way that feels fair to everyone," says Karl Pillemer.

If you’re part of a blended family and want to keep the peace between your biological children and your stepkids after you’re gone, experts recommend these steps.

Formalize your wishes. Recent research from Yale shows parents often favor stepkids as beneficiaries over any relatives other than spouses and their own children. But state intestacy laws, which dictate how your assets will pass to others if you die without a will, typically don’t make provisions for stepchildren.

So if you want yours to inherit anything, you’ll need to make that intent clear and legally binding with bequests via a will or trust or by including them as beneficiaries on financial accounts that pass outside of a will.

Accommodate age differences. There are often big age gaps among children in blended families, notes Carly Doshi, head of family advisory planning and trust services at Flagstar Bank. So their financial needs and when they need to tap assets may be different — one child might be gearing up to, say, buy a first home while another might be nearing retirement.

The solution? Doshi says this is a situation in which trusts come in handy, giving you the ability to spell out when and under what circumstances different heirs get distributions from your estate.

Consider a neutral party for key roles. Parents often pick the oldest child as executor or trustee. But in a blended family, putting a child from one branch of the family in charge of assets for someone from a different branch can spark tensions.

An alternative: Appoint a neutral party, such as an estate attorney or professional fiduciary.

Note: This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.

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In a Berkshire Hathaway shareholder letter, Warren Buffett once advised, "Leave the children enough so that they can do anything but not enough that they can do nothing."

Many parents share this sentiment. A recent survey from Kiplinger and Morning Consult found that parents hope their adult children use an inheritance to improve their lives (22%), not waste it (20%).

Once it's handed over, though, an inheritance can go toward things you'd never condone, or the windfall can shift a child's behavior in unhealthy ways in the long run.

Take David and Kathy, a hypothetical couple who gave their 20-something twins $100,000 each. Instead of using it to buy a house or invest wisely, one twin quit a steady job to day-trade, while the other used it to buy a luxury car that would depreciate over time. What was meant as a gift to open up the future instead became a setback or wasted opportunity.

As Joy Slabaugh, a certified financial planner (CFP) and founder of the Wealth Alignment Institute, explains: "Money can unintentionally interfere with motivation, identity, autonomy or family relationships."

Fortunately, avoiding that outcome doesn't have to change your desire to give or how much, just the way you give it. This holds true for parents as well as grandparents.

Why early inheritances can backfire

An early inheritance is a chance to help adult children while you're still around to see them enjoy it. While more adult children would rather get financial help now (45%) than a larger inheritance later, only 14% of parents say they'd prefer to give now, according to Kiplinger's survey.

Part of that hesitation might stem from research such as a 2026 study that found 42% of heirs spend their entire inheritance within a single year of receiving it. Going from having little to suddenly having a lot can trigger impulsive spending. Depending on the amount, it can also dull the motivation to work hard or invest.

Psychological factors are at play, too. Heirs can experience what researchers call "mortality salience" — the subconscious discomfort of handling "death money," which can prompt rapid spending as a coping mechanism.

Unearned money also tends to be treated more casually than a paycheck. Behavioral economists call this the "house money effect." People spend windfalls, gifts and winnings more freely than money they worked for, as though it were the casino's money rather than their own.

Control of an early inheritance with incentive trusts

For parents who want to give each adult child an early inheritance without fear that it will become a slush fund to live on, one possible solution is an incentive trust.

An incentive trust releases money only when your child meets certain conditions you've set, rather than handing everything over at once. Think of it as a gift with instructions attached. You, the parent, write the rules, while a trustee checks that each one is met before releasing any money. Your child receives a payout only after clearing the bar you set.

If David and Kathy had used an incentive trust, they could have nipped the twins' spendthrift behavior in the bud. Some common conditions they might have required are: a college degree; matching income from a job; or releasing money for a specific step such as buying a first home. Other requirements act as guardrails, such as pausing payouts if a child struggles with substance abuse.

Jon Lapp, a CFP and founder of Haven Financial Advisors, suggests, "Reasonable provisions might support college or vocational training, match retirement savings, help purchase a first home, fund a credible business plan, or give an independent trustee discretion to make staged distributions as the beneficiary demonstrates financial responsibility."

Ultimately, the purpose of an incentive trust is to encourage a desired action or prevent mismanagement. "I would consider this type of trust when the inheritance is large relative to the child's experience, or when there are specific concerns involving addiction, impulsive spending, creditors or an unstable relationship," Lapp says.

What to know before setting up an incentive trust

While an incentive trust sounds good on paper, it can turn into a problem in practice without careful planning.

For instance, Lapp says, "Conditions based on earning a particular salary, entering a certain profession, getting married or having children can become unfair very quickly. Even an earned-income match can penalize a teacher, caregiver, entrepreneur or disabled beneficiary."

Rigid rules can also become outdated, fail to account for unexpected life events such as illness or injury, and place trustees in difficult emotional positions. "When parents use wealth to protect, control, rescue or reward their children, the financial gift can become emotionally complicated for everyone involved," says Slabaugh.

When weighing how best to give an early inheritance, she recommends first asking the right question: "Rather than asking, 'How do we keep our kids from wasting the money?' I encourage families to ask, 'What do we want this wealth to make possible for our children, and what do we want it to teach or reinforce?' "

Other ways to help sooner rather than later

If you plan to give as much as a six-figure sum to your adult children, Lapp advises starting small. "Smaller gifts over several years can provide a useful test of how the child handles money," he says.

Other options Lapp offers include helping fund a Roth IRA when the child has eligible earned income, using a parent- or grandparent-controlled 529 account, paying tuition or medical costs directly to the provider and structuring housing help as a formal loan rather than an informal blank check. He points out that direct tuition and medical payments can also qualify for specific federal gift-tax exclusions when handled correctly.

When the money supports positive choices a child has already made, it can set healthier expectations. That's what parents want most. As Lapp puts it, "The primary goal is to help the next generation, without enabling poor financial management, or creating the expectation that they will always be 'bailed out' by mom and dad."

More Trillion Dollar Talk

• How to Talk to Your Adult Kids About Their Inheritance
• Shielding Your Heirs: The Expert Guide to a Tax-Free Inheritance
• Why So Many Families Are Unprepared for the Great Wealth Transfer — and What You Can Do About it
• Why Leaving an Equal Inheritance to Your Children Could Backfire

One of the biggest misconceptions I encounter is that inherited investments should simply be sold.

Stocks are not cash. Many portfolios are built around long-term goals, whether that's preserving family wealth, generating future income or supporting future generations. Selling everything may often seem like the easiest option, but it doesn't always align with the investor's wishes.

This happens all too often. Investors spend years building wealth through brokerage accounts. They follow the markets, make strategic decisions and carefully build portfolios designed to achieve long-term financial goals.

Then, when it's time to put an estate plan in place, those same accounts are often left out of the conversation.

When stock portfolios aren't properly addressed in an estate plan, loved ones can be left trying to answer questions they were never prepared for.

• Should certain investments be kept or sold?
• Was the portfolio intended to support future generations?
• Were there specific goals behind the investment strategy that beneficiaries should understand before making big decisions?

If there are no clear instructions, even the most well-intentioned estate plans can become a headache for beneficiaries and cause confusion or worse — costly mistakes.

Most Americans haven't planned for their assets

Estate planning remains widely neglected. More than half (56%) of Americans don't have a will or trust, according to Caring.com's 2025 Wills Survey. People still view estate planning as something that can wait until later or is only for wealthy individuals.

This myth leads to countless assets being left without clear instructions for the people who will eventually inherit them.

Investing has also become more accessible than ever. More than 145 million people globally used stock trading apps in 2024, according to the Business of Apps Fintech App Report 2025. These apps give individuals easy, user-friendly access to building and managing their own portfolios.

The challenge is that while investing has become easier, planning for what happens to those investments after death often doesn't take place. Countless investment accounts exist without any clear estate planning instructions attached to them.

This problem isn't limited to people who have no estate plan at all. I often see it among people who have already taken the important step of creating one.

They may have a will. They may have discussed their wishes with family members. They may even have worked with attorneys or financial professionals. Yet their stock portfolio remains largely undocumented.

Family members may know the accounts exist but have little understanding of the intentions behind them. They may recognize certain holdings but don't understand why they were purchased in the first place.

• Was a particular investment intended to be held for another decade?
• Was the portfolio built to generate income for a surviving spouse?
• Was preserving the account more important than distributing it immediately?
• Who was the investor's financial adviser?

Those answers, along with important details about the investor's risk tolerance, are rarely documented, and beneficiaries are often left making important financial decisions without the context that guided the investor's strategy in the first place.

Stock liquidation isn't always the best plan

I've seen beneficiaries inherit a portfolio and begin liquidating positions simply because they don't know what else to do. That tactic is understandable. When there are no instructions, people are forced to make decisions based on limited information.

Some investors may have wanted heirs to retain certain long-term investments. Others may have wanted the portfolio to support goals such as education, home purchases or broader family support.

There may also be important tax implications beneficiaries should understand before taking action. Without guidance, those intentions can easily be lost.

The situation becomes even more complicated when there is no transfer on death (TOD) designation, no beneficiary designation or no trust directing the asset.

In those cases, the stock portfolio will typically become part of the probate estate, creating additional delays and expenses, and leaving the management of the portfolio to the administrator or executor rather than the ultimate beneficiary.

Before assuming a portfolio should simply be liquidated upon their death, investors — whether self-managed or accredited — should decide how they want those assets handled.

• Should certain investments be retained?
• Should others be sold and distributed?
• Have those wishes been documented clearly enough for beneficiaries and executors to carry them out?

The goal here is to leave enough context behind so beneficiaries aren't forced to guess. That starts with:

• Maintaining an inventory of brokerage accounts
• Keeping beneficiary information current
• Documenting the purpose of the portfolio
• Clarifying which holdings should be kept or sold
• Leaving contact information for any financial professionals involved

These details will make a significant difference when beneficiaries are trying to make informed decisions during a difficult time.

What happens when no instructions exist

When no instructions exist, families are often left piecing together information on their own. In many cases, the first challenge is simply identifying what accounts exist. A family may know a loved one invested throughout their lifetime, but have no idea where those accounts are held.

Locating records, accessing accounts and understanding how they fit into the broader estate can take significant time, creating unnecessary administrative burdens for executors.

Then comes the decision-making. I've seen beneficiaries inherit portfolios and immediately begin selling assets because they believe that is what they're supposed to do. I've also seen families disagree because each person has a different understanding of what the investor intended.

Nobody is acting with bad intentions. The problem is that they're trying to make important decisions without enough information. What should have been a relatively straightforward transfer of wealth becomes a far more complicated process than it needs to be.

What investors owe their beneficiaries

A few clear instructions go a long way and can help loved ones understand the purpose behind a portfolio, preserve wealth where appropriate, avoid unnecessary confusion and make more informed decisions.

Estate planning is not simply about transferring assets. It's about transferring clarity. You have to remember that the more guidance investors leave behind today, the easier it will become for beneficiaries to make thoughtful decisions when they don't have someone to guide them.

Related Content

• Shielding Your Heirs: The Expert Guide to a Tax-Free Inheritance
• 5 Questions to Ask a Financial Adviser About an Inherited Stock Portfolio
• Will This 'Tax' Tear Your Family Apart, Even Though Their Inheritance Is Split Equally?
• 3 Life Events That Should Trigger an Immediate Estate Plan Review
• What Really Happens in the First 30 Days After Someone Dies (and Where Families Get Stuck)

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Imagine this: You receive a check with the proceeds of an inheritance. Whether you were expecting it or not, the question now is: What do you do with it?

Here's where you might run into some problems. If the amount is larger than $10,000, most banks won't accept a mobile deposit. A Kiplinger colleague recently experienced this after losing a loved one and encountered unexpected challenges.

The check arrived, but they couldn't deposit it electronically. Another issue? They didn't live close to any of their bank's brick-and-mortar branches. If you find yourself in a similar situation, here's what to do.

Ask your bank for solutions

My colleague reached out to their bank, which suggested overnighting the check. If you go this route, send the check via certified mail, then you can track the package and have proof that the bank received it.

But mailing a large check can be uncomfortable for many, including my colleague. If you don't want to mail your check, contact your bank directly to explain your situation.

Chances are, they'll find ways to work with you. Banks usually set deposit limits based on your average daily balance and account age for both savings and investing accounts such as IRAs. Yet, they'll give you more clout when depositing a larger amount.

Other ways to deposit your beneficiary check

Some banks partner with other institutions. This is more prevalent with credit unions. If you don't have a local physical branch, a partner institution might, allowing you to conduct in-person transactions seamlessly.

Another option is to contact the will's executor. Ask them to cancel the check and wire your funds electronically. This can bypass any deposit limits the bank imposes, giving you quicker access to your funds.

My colleague reached out to their brokerage firm for help. The firm eventually decided to send someone to their house to pick up the check for deposit. This is likely a last resort, as many banks don't have the resources or won't offer that service.

Once you deposit your inheritance check, another question emerges: What do you do with the funds?

Buy yourself some time with this step

Proper planning goes a long way to ensure the gift you receive helps you achieve your goals. I recommend opening a high-yield savings account, a money market account or a short-term CD until you decide if there's anything further or more specific you want to do with the funds.

Look for online banks since they offer higher APYs, lower fees and many accept mobile deposits. On the high-yield savings end, here's a smart recommendation:

Money market accounts are great if you want to grow your cash with the purchasing power of a checking account. Keep in mind that some banks set transaction limits, so this account works best for someone who wants guaranteed returns while making minimal transactions.

Meanwhile, a CD locks in a decent rate of return without market volatility, thanks to its fixed interest rate. I recommend a short-term option of three to six months or a jumbo CD (if the deposit is $50,000 or more) to earn a sizable return while you figure out next steps.

Use this Bankrate tool to find and compare options fast:

When choosing an account, look for FDIC insurance. This protects your deposit up to $250,000 per account holder, giving you peace of mind.

Once you choose a savings account, do this next.

Set goals to create lasting wealth

Your loved one left you a valuable resource. It's up to you to determine what to do with it. If you haven't been in a position in which you've had this much money before, my first tip is to find a reputable financial adviser or personal banker.

When searching for a financial adviser, look for the following qualities:

• Fiduciary designation. This ensures they act in your best interest rather than prioritizing commissions or sales targets.
• Reputation. Read client feedback to gauge trustworthiness. Common complaints across reviews can point to recurring issues you might experience too.
• Personal. Find an adviser who asks open-ended questions about your financial goals and values rather than boxing you into a one-size-fits-all approach.
• Services. Can they cover all your financial needs, such as retirement planning, tax strategies, asset allocation and estate planning?
• Proactivity. Goals evolve. Look for an adviser who commits to meeting regularly, so they can update plans as priorities change.

One of the best things about working with a reputable financial adviser is that they can take some of the planning off your plate. Once they understand your goals and values, they can tailor a plan to pay off debt, save/invest, plan your estate and address any other financial concerns you might have.

If you don't have an adviser yet, you can use this Bankrate tool to find a reputable one quickly:

Ultimately, receiving an inheritance check can be a challenging process at a time when you're experiencing the fog of grief. However, by following these steps, you can find the right deposit solutions, give yourself time to figure things out and develop a plan that helps you build wealth now and well into the future, as the gift was intended.

Related content

• Manage an Inheritance Like a Pro in Just 7 Steps
• What Kind of Heir Are You? Take Our Quiz to Reveal Your Money Style
• No One Wants to Ask Their Aging Parents About Their Finances, But Here's How
• Where to Put Inherited Money: What to Do After You Receive a Lump Sum
• How Real Families Are Handling The Great Wealth Transfer

As part of our Trillion Dollar Talk campaign, Kiplinger editors — Alexandra Svokos, Kiplinger digital managing editor and Diane Harris, Kiplinger Personal Finance Magazine deputy editor — brought together three of our favorite experts to discuss inheritance.

We had an invigorating conversation about how families can approach these conversations and the types of problems that often come up, as well as highlighting possible solutions for those scenarios.

Joining us for our panel conversation were: Valerie Galinskaya, managing director and head of the Merrill Center for Family Wealth®; Brad Klontz, associate professor of practice in financial psychology at Creighton University Heider College of Business; and Ryan Coon, attorney at Anderson Advisors and J.D. from Willamette University.

Watch the full conversation here:

During this episode of Kiplinger Conversations, we asked viewers to send us their questions. Here's a round-up of those questions, along with our responses. If you have questions on this topic, please reach out to us at KipInheritanceTalk@futurenet.com.

We will do our best to answer as many questions as we can, and your questions might inspire future articles for Kiplinger. The answers provided by our editors are for general informational purposes only. Not all questions submitted will be published, and some will be edited for clarity.

1. Addressing specific numbers.

Question: The overarching question is, how do you have an informed conversation with your adult children without having to discuss specific dollars and cents?

Diane Harris: Great question! It's a very common concern among parents, not wanting to disclose exact numbers.

And you don't need to, honestly. Your general intentions, and why you've made the decisions you've made, and what plans you have in place are what the kids need to know, not numbers. After all, those numbers can change, depending on how long you live and what your expenses will be, particularly when it comes to health or long-term care.

The critical details are not the amounts you intend to leave but whether you have a will and other estate planning documents and, if so, where to find them; the kind of assets you have (for example, do you have accounts that will pass outside of a will, property in addition to your primary residence, investment accounts, and so on); and how you plan to divide them and why.

In particular, it's important to explain your thinking if you intend an unequal distribution of assets among your children, so they understand your reasoning.

And if you have money you intend to give for specific purposes during your lifetime — say, if you plan to help pay for a wedding or assist with the down payment on a home or your grandchildren's college education — it would be good for the children to know that too, so they can plan accordingly.

Alexandra Svokos: It's not unheard of to be concerned about this. In our Trillion Dollar Talk survey, conducted by Morning Consult, we asked adult children to write in the one question they would want to ask their parents about a possible inheritance. The most common response we heard was a version of, "How much will I receive?"

On the flip side, the most common reason parents said they haven't talked to their kids about inheritance yet is that "there are too many unknowns."

Don't let this uncertainty stop the conversation from happening in the first place.

As Diane said, you don't have to lay out everything in your estate — but I would recommend you aim to give your children a ballpark idea of what's in your estate so you can both plan appropriately. Again, exact numbers aren't what matter here; you just don't want to leave them surprised and unprepared when you're gone.

Additional reading:

• We Know You'd Rather Talk to Your Kids About Politics Than Inheritance. Here's the Right Way to Have That Conversation Anyway.
• Why So Many Families Are Unprepared for the Great Wealth Transfer — and What to Do About It
• Counting on the Great Wealth Transfer? Why It May Not Pan Out the Way You Hope

2. One-on-one vs group conversations

Question: Do you feel it is better to have a family group inheritance discussion or one-on-one with each family member?

Alexandra Svokos: The answer to this largely depends on your own family dynamics. If your family regularly has open (and healthy) conversations about finance and future planning, a group setting would make sense. If, however, group settings tend to bring up arguments, you may want to start the conversations one-on-one.

Starting with a one-on-one conversation is also helpful if you're splitting an estate anything besides explicitly equally — that way, you can explain your reasoning without having to balance group dynamics, and you'll be in a space where the heir can openly ask questions to understand your decisions.

But what I would keep in mind, as Ryan said, is that it's not a one-and-done conversation. You can have both group discussions and one-on-one conversations to make sure everyone feels comfortable and confident.

Additional reading:

• The Conversation You’re Avoiding: How to Bring Up Estate Planning with Your Family

3. Handling older parents' finances

Question: My husband is an only child, and his parents own two homes. They are 88 and 87. They have made it clear that everything is coming to us and have started to gift us the max each year $76,000.

We don't know how much they have, and we don't need the money. We worry that they might need extensive care as they get older (her mother lived to 106 years old). We are keeping the money in an interest-bearing account so we can use it for them if they need it later. Are there any recommendations as to how/where we keep these funds they are gifting to us? We want to do what is best for them.

Alexandra Svokos: Thanks for your question. Long-term care costs are something many families are worrying about. In fact, our survey found that 24% of older parents fear that ongoing care costs will deplete their estate.

First and foremost, we recommend speaking to professionals for advice on your own particular case. Our answers here are for general information purposes only.

As a general principle, it's worth having a conversation to ask parents if they have their own plans for managing long-term care. They may feel comfortable making gifts because they have a plan in place, for example, and if not, you can discuss how to set up a plan and what makes sense for you both.

Again, this is generally speaking: If you have funds you may need to use within a short time span, an interest-bearing account where you can immediately access funds (like a high-yield savings account) is a decent idea. If you feel sure you won't have to use funds for a longer time period, you can consider CDs (which typically have higher rates, but lock your money in for a set time period) or investing in the market, although that comes with higher capital gains tax rates if sold within a year, and of course, more risk than, say, a locked-in CD.

Additional reading:

• No One Wants to Ask Their Aging Parents About Their Finances, But Here's How
• Where to Put Inherited Money
• Gift Tax Exclusion 2026: How Much You Can Give Tax‑Free This Year
• I Have $150,000 That I Don’t Need Anytime Soon, but I Don't Want To Put It in the Market. What Should I Do?

4. Estate planning for blended families

Question: Given the realities of today’s blended and often fractured family dynamics, is there a provision that allows us to safeguard the inheritance so it stays within the family?

Diane Harris: Yes, in blended families, as our panelists mentioned during the discussion, a will is often not sufficient to ensure your assets pass as you want them to and protect the people you love and want to provide for.

One key estate-planning tool that helps with this is a trust, which allows you to make stipulations — for example, you might set up a trust in a way that provides for a surviving spouse during his or her lifetime but then ensures that the remaining assets will pass to your children from a previous union. Whatever the specifics you want to put in place, a trust is often a good tool. Laying out your intention for personal property in a letter of intent, while not legally binding, is also often helpful.

Often the most contentious items in an estate — in all families, not just blended ones — are items with emotional resonance, not the investment portfolio. Who gets Mom's engagement ring or Dad's prized watch or the ornament that sat on top of the Christmas tree or Grandma's yellow pie plate… those are the items that can cause the greatest friction in families, experts tell us.

An estate planning attorney can help with all of these decisions. You can find them either via personal recommendations from people you trust or by checking a professional directory such as those from the National Association of Estate Planners and Councils or the American College of Trust and Estate Counsel (ACTEC) Directory.

Additional reading:

• The 5 Essential Trusts You Need for 2026 Estate Planning
• This Is How the 'Brady Bunch' Safety Net (aka a QTIP Trust) Protects Your Kids' Inheritance
• The Six Estate Planning Steps Every Blended Family Must Take
• The Little-Known Tool to Protect Your Retirement Savings in a Divorce

5. Children with particular circumstances

Question: How do I or you address issues of a child with dementia and estrangement, re any or partial benefits of an inheritance?

Alexandra Svokos: This is where you definitely want to make sure to get professionals involved. If you are planning to leave something to a child or other heir with whom you're estranged, a letter of intent can help explain the inheritance to them without breaking an estrangement. I would just caution you to remember that a letter of intent is about explaining an inheritance, not about reopening conversations when you're not around to have them.

For a child with dementia or special needs, the answer here is again to make use of trusts. You can, for example, set up a special-needs trust. This is also why I say you'll need professionals involved – be careful about setting these systems and guardrails up so that your legacy gets used in the way in which you want it to be used.

Additional reading:

• The Benefits of a Special Needs Trust
• A 5-Step Plan for Parents of Children With Special Needs, From a Financial Planner
• Managing the Financial Dominoes of Special Needs Planning: A Practical Guide for Long-Term Security
• How to Plan for Retirement When Your Child Has Special Needs
• Is a Living Trust the Right Move for Your Estate Plan?

Many families reach a point when a loved one requires part-time or full-time care due to health issues or aging. In families with multiple children, caring for an aging or ill parent often falls on one sibling more than the rest.

Caregiving in any capacity can take a financial toll, known as the "caregiver penalty." Research from the Employee Benefit Research Institute finds that caregivers are likely to have fewer financial assets than non-caregivers, and more debt. This isn't shocking, since caregivers typically have to sacrifice career growth and associated wages.

Typical estate plans compound the problem, since many parents split their assets equally among their children even when one child stepped up to provide care more than the others. This inevitably penalizes the caregiver, even if unintentionally. But there are ways around that.

Here's how parents can make things right when one child sacrifices their own financial well-being to provide care.

Create a caregiver contract

Some parents choose to reward their children for providing care through an inheritance. But that's not the only avenue to explore.

"If parents want to pay for their child to care for them, they can create a caregiver contract that outlines the caretaker duties, how much they will be compensated, and mileage for driving parents," says Kelsey Simasko, attorney at Simasko Law. That agreement can have a specific equity clause designed to compensate the caregiver using property, home equity, or other assets.

As Simasko explains, a caregiver contract can be worded to make it clear that the payments are not a gift, but for services rendered. This allows a grown child who may be working less and therefore earning less to receive compensation immediately, thereby reducing near-term financial stress.

Of course, Simasko recognizes that not all parents have the funds to begin paying their child for caregiving services.

"If this is not the case, then providing their compensation as inheritance may be a better option," she says.

But if you do decide to pay a child for caregiving services, you should have an elder law attorney create a contract for you so you can be sure it complies with Medicaid rules, Simasko insists.

Misty Ralston, owner and attorney at Ralston Law, says a caregiving contract should spell out the caregiving duties and associated compensation. She also says such a contract should ideally be in place before services are rendered, and that the caregiver should maintain a log of the hours they work.

"Otherwise," she warns, "those payments will be treated as a gift or uncompensated transfer for Medicaid or might be considered as something coerced upon the parent as an afterthought rather than a true contract for services."

Keep in mind that Medicaid uses a five-year look-back period, so the transfer of certain assets may compromise eligibility.

Ralston also says that before drafting such a contract, it's best to research what the average professional is being paid for these services. Also, she insists, "You want to make sure that the person signing has capacity to do so, and get a letter from the doctor stating the person’s capacity as well as the need for these services."

And, Ralston says, "If the child doing the work is also the power of attorney, they should not sign for the parent. Allow the parent to sign themselves [and] have the parent meet with their own attorney."

Before putting such a contract in place, Ralston recommends having a family meeting to discuss what is happening and why. All family members should sign a written acknowledgment confirming they understand the arrangement. Many families find discussing inheritance difficult, so we have tips to get you started in How to Talk to Your Adult Kids About Their Inheritance.

Finally, any family entering into a caregiver contract should consult a tax professional. The parents paying for care may owe a "nanny tax." And the adult child receiving compensation may have to report it as taxable income.

Compensate the caregiver with a larger inheritance

In a caregiving situation, it's often easier, logistically and financially, to give a caregiving child a larger share of an inheritance. Ralston says there are several ways to do this.

One option is to make a specific bequest that provides a preset sum to the caregiver as a thank you for stepping up during the parent's time of need. That can sometimes be "easier to swallow," she says, "than an extra percentage of the estate."

Another option is to gift the home to the caregiving child. If they lived with the parent for two years prior to going into a nursing home for Medicaid, they may be entitled to use the Caregiver Child Exemption during estate recovery.

"Since the house might otherwise have to get sold to pay for the Medicaid 'bill,' why not give that to the child that has been caring for the parent and for the home all this time?" Ralston says.

Otherwise, a parent might choose to designate a certain account or life insurance policy to the child.

"It doesn't matter what option one chooses," Ralston says. "What matters is how it looks to others."

Simasko agrees. While adjusting a will or trust to give a caregiving child a larger inheritance than their siblings is always an option, "this always carries the risk of the siblings fighting," she says.

One approach Simasko recommends is having parents adjust each child’s inheritance from time to time to ensure it reflects the actual amount of care needed. The flipside, though, is that amending a trust costs money, so adjusting beneficiary designations could get expensive, even if it's only done once a year.

No matter which option you choose, the key is to have open conversations at the family level before one sibling starts providing consistent care. That way, everyone is on the same page, and there are fewer surprises, conflicts or ill feelings.

More Trillion Dollar Talk

• Why Leaving an Equal Inheritance to Your Children Could Backfire
• 8 Estate Planning Secrets You Can Borrow from the Ultra-Wealthy
• Why So Many Families Are Unprepared for the Great Wealth Transfer — and What You Can Do About it

Everyone manages money differently, but most of us fall into predictable patterns when it comes to spending, saving and planning for the future.

Understanding your personal financial style isn't just an exercise in self-awareness — it's the key to making smarter decisions, reducing money stress and building a strategy that works for your lifestyle. That's especially true if you're receiving an inheritance and want to manage it responsibly.

Are you a financial Fortress Builder, a bon vivant Life Maximizer, a community-minded Legacy Philanthropist or a middle-of-the-road Strategic Harmonizer?

Take this quick quiz to discover your financial archetype and unlock insights tailored to how you naturally handle money.

Related Content

• We Asked 5,000 Americans About Inheritance and the Great Wealth Transfer. Here's What We Learned
• The Great Wealth Transfer is Creating a New Generation of Family CFOs
• 5 Questions to Ask a Financial Adviser About an Inherited Stock Portfolio
• Being the Executor of an Estate Is a Thankless Job: Here's How to Do It Well Anyway

Older generations hold $124 trillion in assets they plan to pass on to loved ones and charity over the next two decades. Many will wait until they are gone to share the wealth, but some are opting to give while they live.

It makes sense. A new survey conducted by Morning Consult on behalf of Kiplinger found that, when asked what they would want an inheritance used for, both parents and adult children said practical things such as paying down debt, buying a home or securing a retirement.

"There's a recognition that the money would be more useful in their 40s and 50s than in their 60s and 70s," said David Blanchett, head of retirement research at Prudential. "But if you wait to give them that money, you won't get to see it in action. You won't know what impact it has."

For retirees who plan to wait until they die to pass on their inheritance, fear of outliving their money can create paralysis. After all, people are living well into their 80s, which means their money needs to last longer. "There's always an element of what if I need it, I won't be able to take it back," says Michael Conrath, JPMorgan's chief retirement strategist. "Legacy and retirement are connected in terms of the math and in terms of the emotions."

To overcome the fear of running out of money, Conrath says to break retirement savings into three buckets — stable, variable and legacy. The stable bucket is for recurring bills such as rent, food, utilities and healthcare, while the variable bucket is for travel, hobbies, entertainment or other wants. The third bucket is for legacy, which is where the giving comes from.

"Once you have those two parts covered, it really gives people the freedom and the comfort knowing they have the capacity to gift money," said Conrath. "It's a way to remedy some of the fear."

Benefits of giving while you're living

There are several reasons to favor giving while you're alive, for both the giver and the receiver.

Benefits for givers:

• They can reduce the total size of their taxable estate before passing away, minimizing potential state or federal estate taxes.
• They can gift up to $19,000 per recipient in 2026 (married couples may gift up to $38,000 to an individual) without triggering gift tax filings or dipping into their lifetime exemption.
• They may gift appreciated stock to a qualified charity or an heir, thereby avoiding capital gains tax on the stock's growth.
• They may pay medical or tuition bills directly to the institution (which bypasses the $19k limit entirely), or fund a 529 plan.
• They experience the immediate joy and satisfaction of supporting loved ones during key life milestones.

Benefits for heirs:

• They can use the funds immediately to improve their financial health.
• They don't have to pay taxes on it; the federal tax code doesn't treat gifts as taxable income for the recipient. (Appreciated stocks are the exception.)
• Direct gifts eliminate potential delays and legal complications associated with going through probate court after a donor passes away.

How to give while you live

If giving while living sounds like something you want to do but you aren't 100% on board, Blanchett says to test the waters with small gifts. You don't have to give your heirs their entire estate, but you could help your adult child with a down payment on a home or pay for daycare or college tuition for your grandchild.

It can be something as small as a cash gift or an extra deposit into the 529 account. Not only can you help them now when they need it, but you're also preparing them to manage the inheritance they will receive later.

Don't sacrifice your retirement

There is a lot of joy and satisfaction in giving while living, whether it's to your adult children, grandchildren or a beloved charity. Don't start writing checks willy-nilly, though. If you plan to rely on Medicaid, you could disqualify yourself by giving monetary gifts during the 5-year look-back period. Be certain you have a locked-down plan for how to pay for long-term care, as those costs have ballooned in recent years.

In other words, giving can't be at the expense of your retirement. As Pam Krueger, founder and CEO of Wealthramp, warns, you don't want to end up giving too much and being broke.

"The best answer for most people is you don't have to do it all now, and you don't have to do it all later," said Krueger. "Protect your own financial security first and foremost, and then say, 'OK, I can give this much now while I'm alive and this much when I'm dead.'"

Editor's note: Want more help making this decision? Take our quiz on giving while you live vs waiting until death.

We know this can be a contentious conversation. If you want to share your opinion, reach out to us at KipInheritanceTalk@futurenet.com.

More Trillion Dollar Talk

• From Buffett to Beyoncé: What Celebrities Have Said About Inheritance
• I'm a Retirement Editor, But My Parents' Estate Tripped Me Up with a Snake, a Gun and a Mystery Box
• The Great Junk Transfer: Heirs Want Meaning, Not More Stuff
• Before You Leave Your Home to Your Children, Ask These Questions

Give while you're living or wait until you die? That's the choice for many retirees sitting on a sizable nest egg as they live out their golden years.

At last check, an estimated $124 trillion in assets are expected to be passed on in the Great Wealth Transfer, according to research firm Cerulli Associates. While most of it will go to heirs after their deaths, many people want to give while they are still alive.

After all, a new Morning Consult survey conducted on behalf of Kiplinger found that when asked what they would want an inheritance used for, both parents and adult children cited practical uses such as paying down debt, buying a home or securing retirement, all of which can benefit heirs now or in the future.

On the one hand, if you wait until you die, the money has more time to grow and compound; on the other, if you give while you live, you can enjoy the fruits of your labor or help someone now. You can also do a little bit of both: give a little while you are alive and leave the rest for when you're gone.

Which giving approach works best for you depends on your financial goals, risk tolerance and personal values. To determine which type of giver you are, take our quiz.

Editor's note: We know this can be a contentious conversation. If you want to share your opinion, reach out to us at KipInheritanceTalk@futurenet.com.

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• Is Your Will 'Fair'? Estate Planning Is About More Than Money
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Asking about your parents' finances can feel awkward until an emergency hits. You've procrastinated for years, but now, here you sit across from your parents at the kitchen table, talking about the grandkids or their last vacation, and a quiet voice in your head starts whispering about the urgency to ask the important questions:

• Do they have enough money or assets set aside if one of them needs long-term care?
• Do they have a will?
• Who has the passwords to their online banking accounts?
• What happens to the house?

But you worry this conversation might sound as if you're angling for an inheritance, so you keep quiet.

That scenario might be especially familiar to Gen Xers, many of whom are watching their parents age while still supporting their own children or planning their own retirement. Relying on an inheritance can be risky, and talking about it still feels taboo.

It feels so taboo that only about two in five families have discussed inheritance plans, according to new research from a Morning Consult-Kiplinger survey. Not to mention that families rank inheritance next to last among topics they feel comfortable discussing.

However, Psychology Today advises that talking openly about money can reduce anxiety, strengthen relationships and improve well-being.

Unsure of how to bring up money with your aging parents? Here are a few tips to help you start the conversation.

The trade-offs to waiting to discuss money

Many families treat money as a hands-off topic. That is until a parent's long-term care needs, sickness or financial shortfall forces the issue. But by then, decisions about who pays what, how much support is necessary or what trade-offs are acceptable tend to be reactive rather than planned.

Evan Mills, MBA, associate financial adviser at Scholar Advising, points out that if you wait, you could reach estate limits, so the wealth your parents accumulated over the years doesn't go to the next generation; it goes to the government and the tax bill. "It's also difficult to manage at that point if you don't know the wealth your parents accumulated."

Cameron Huddleston also knows the cost of waiting. The personal-finance journalist (and frequent Kiplinger contributor) was 35 when her mother was diagnosed with Alzheimer's. By the time she tried to unravel her mom's finances, the conversation had become much harder.

She later wrote the book Mom and Dad, We Need to Talk, precisely because she wished someone had pushed her to start earlier. "When there's an emergency, it's a lot harder to have a rational conversation about finances," she said. "Your emotions are all over the place."

The inheritance expectation gap

Recent surveys from 2025 and 2026 reveal that conversations about parents' finances remain rare. For instance:

• The Kiplinger-Morning Consult survey points out that 60% of adult children would rather talk to their parents about politics than inheritance, and 80% of parents would rather discuss their physical health than their inheritance plan.
• Among parents age 55 or older with at least $500,000 in investable assets, 68% have not discussed what their children might inherit, and more than half have not shared their net worth. Nearly half of families have still not engaged in estate-planning conversations, according to Fidelity's 2025 Family & Finance Study (PDF).
• Key Wealth's 2026 Inheritance Pulse Poll (PDF) revealed that only 34% of families who expect an inheritance have had a direct family conversation. The rest were operating largely on assumptions. Half of those who had never raised the topic said they avoided it because they didn’t want to appear to be counting on the money.
• Catalyst Advisory's "Family Wealth in America" study found that only 14% of adults had held detailed inheritance discussions, while 36% had never discussed inheritance with their families. Nearly one in four people who expected (or thought they might receive) an inheritance had never talked about it.

How to start a conversation about money with your parents

Parents hesitate to talk about their finances mainly because of uncertainty: 34% cite too many unknowns about how long they'll live or how much will be left, according to the Kiplinger-Morning Consult survey. Another 22% say they haven't gotten around to it. But only 7% say they stay silent because they're uncomfortable discussing money with their children.

Mary Ware, senior wealth adviser and managing partner at Carnegie Private Wealth, says the best way to approach these tough conversations is from a place of preparation, not control. "Don't start by asking, 'How much money do you have?' Start with, 'If something happened and you needed my help, would I know what to do? And what is most important to you?' "

Timing is crucial. Conversations with parents about their finances often work better as a series of short chats than one long talk.

Other ways to kick-start a conversation might include:

1. Choose the right time. If possible, pick a time free of distractions. That might mean avoiding holidays and large family dinners that are already chaotic.
2. Decide whether to start one-on-one or with your siblings. Sometimes you might feel more comfortable beginning this kind of conversation privately before bringing in the rest of your family. If you have siblings, it can help to get everyone on the same page beforehand so no one feels blindsided or left out.
3. Ease in gradually rather than diving straight into the numbers. Lisa McCurdy, founder and managing partner at The Wealth Counselor, advises skipping talk of death and dying when initiating a conversation. Ask, "If it takes 90 days to recover from your procedure, with no one authorized to manage your affairs, what would you be confronted with once you returned home, fully recovered, to your accounts and property?" This frames the conversation around the lack of predictability and the mess that could develop if nobody has been left in charge.
4. Have a few follow-up topics ready. If your initial conversation is brief or nonproductive, try asking more direct questions next time, such as where their important estate documents are kept or if they'd like help organizing their paperwork
5. Leave the option to return to the conversation later. These talks rarely finish in one sitting. Give everyone space to revisit the topic after a few days or weeks. Consistency over time usually works better than pushing for every detail at once.

What needs to be covered

Carnegie Private Wealth's Ware says her bare minimum is knowing where their key financial and legal documents are stored, which bank, investment and retirement accounts they hold, and how to contact their financial, tax, insurance and legal advisers.

You might also want to ask whether they have an updated will, financial and healthcare powers of attorney, and other appropriate estate-planning documents. Find out what insurance coverage they have, what regular bills need to be paid and how they pay them, and where to find information about pensions, Social Security and other sources of income.

She's also a big believer in organization. "An organized financial life is a gift we can all give our loved ones. Your adult children shouldn't have to become financial detectives during an emergency. Whether your information is kept in a binder, secure digital system or another organized place, make sure the appropriate person knows where it is and how to access it."

Another often-overlooked question is about their long-term care preferences and whether they’ve set aside any insurance or savings to cover them. Roughly 70% of people turning 65 will need some form of long-term care, and the costs can quickly upend retirement savings.

Bring in neutral help if needed

When conversations stop or emotions run high, a trusted third party can help lower the temperature. Mills says,

"We always joke with clients to just blame the adviser when breaking the ice." When you have a meeting with a financial adviser, he or she might think it's important to add a potential inheritance and what that might look like, into the plan, she said. A well-designed structure can fall apart if nobody really understands the plan.

Joseph Fresard, attorney at Simasko Law, recommends introducing the conversation by bringing up difficulties friends or family members went through who did not have their affairs in order and letting them know you've found an attorney who you think could help get their estate plan done.

A financial planner or estate attorney can reframe the discussion as professional planning rather than a cross-examination. Your parents might want to go over the details with an adviser first before bringing you into the conversation.

Know enough to help your parents protect their future

Keep in mind that asking the size of your future inheritance might not be in your best interest at this time. You don't need that exact number to be informed.

What you do need is enough information to help your parents protect their own future and to prepare yourself for what’s to come. Essentially, you're asking for information to help keep them from losing their dignity and their independence, and that's a conversation worth having.

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We asked millionaires to show us the money, and several dozen have. The bulk of them are ordinary people like you and me, working hard, saving diligently and living within their means.

They're teachers and entrepreneurs and project managers from all across the U.S., from Shoshoni, Wyoming, to West Lakeland, Minnesota, to Virginia Beach and San Diego. They're taking care of their families and planning for the future.

They're also part of the Great Wealth Transfer ­— the estimated $124 trillion of assets that will flow from older generations to heirs and charities through 2048.

So we wanted to know how they're talking with their heirs about inheritance and all the uncomfortable details that involves.

To find that out, we created what we're calling the Millionaires Panel, made up of 30 of the millionaires who've been featured in our ongoing My First $1 Million feature. Their identities are known only to us to protect their privacy and to encourage them to speak openly. What an enthusiastic crowd they are, too — on the first survey, we had a 100% participation rate. Who could ask for more and get it?

Let's find out where these real-life millionaires stand on these three issues:

• Transparency with their kids about their financial situation
• Equal vs unequal estate distribution
• Capping inheritance to avoid demotivation

Are these millionaires talking with their kids about their money?

According to Kiplinger's Trillion Dollar Talk survey, conducted by Morning Consult, more than half of parents ages 55 and older say they rarely or never discuss money with their children.

That number changes as income increases. Overall, 45% of adults say they discuss money often or sometimes with their children, but among adults with income above $100,000, that increases to 56%, with only 11% saying they "never" do (as opposed to 18% overall).

Many of our Millionaires Panel members have followed this trend, focusing on financial literacy when their kids were young and prioritizing financial transparency as adults.

One respondent reported developing what he calls the Family Wealth Mission Statement to outline his family's values and priorities so his kids know what's important to him and their mother. "Communication is vital in preparing the next generation to be good stewards in preserving, growing and passing on this gift and legacy."

Another parent shared that he and his spouse keep their family dynamics in a healthy place by being upfront about the impact of retirement spending on the kids' inheritance.

"Since we are open with our children about our finances," he said, "and since they understand that their inheritance is, in part, determined by how long we live and how much we need to spend to take care of ourselves during retirement, they have been very supportive."

What other panelists said:

• "The broad concept of estate planning was incorporated into a gradual education process about money, saving, investing, debt and retirement planning that began in childhood. They were all familiar concepts that reduced at least some of the fear or uncertainty when they became an adult and began to deal with them firsthand."
• Our financial talk "was very matter of fact (take the emotion out of it). We're all going to die someday — better for everyone to discuss with a clear head... The more you communicate and discuss, the freer you become!"
• "(In our conversation), I wanted to make sure there was guaranteed money for the kids in case my husband remarries a gold-digger, you know? I mean, not really, but yeah, it's crossed my mind."

Should inheritances be split 50/50?

On the question of whether they plan to split their estate equally among their heirs or perhaps adjust inheritances based on their kids' individual circumstances, many of the panelists said they are defaulting to equal distribution, with one parent noting that people should avoid picking favorites.

"There should be no favorites," he said. "Love all that are close to you equally. Don't create a rift or friction after you pass."

Another parent has decided on a 50/50 split despite struggling with whether she should differentiate because her daughter has children.

"I worry about 'even' vs 'fair,'" she said. "One of my kids (my daughter) is married and has children; the other (my son) is currently single with no kids. Should she get more because of the grandchildren? Or should I just run with two kids, 50/50? Right now, it's the latter."

Illustrating a dilemma many parents face, one respondent shared how his mother left all of her investments and savings to the son who "needed it most," because he was underemployed and living paycheck-to-paycheck. Then she divided her physical assets in other ways.

"We discussed who needed financial help vs who was deserving of help," the panelist wrote. "Once we worked through that conversation, it became very easy."

What other panelists said:

• "I don't plan to leave any money to people. It's all going to charity upon my death."
• "Both of our children are fiscally responsible and relatively financially comfortable, so there is minimal motivation for financial jealousy."
• "I think people rarely admit that they want to leave certain close family members, i.e., siblings, children, etc., more money simply because they like them better."

Should inheritances be capped to avoid demotivation?

Another area we explored involves whether parents are planning to limit how much they leave their children to ensure they don't decide to crash on the sofa for the rest of their lives.

For example, Microsoft founder Bill Gates has said that he's leaving less than 1% of his billions to his three children because he doesn't want his good fortune to prevent them from achieving their own success. Granted, less than 1% of $115 billion will still be hundreds of millions, but still.

Taking a similar approach, one of our panelists wrote, "I have a fear that if they find out the potential inheritance, it could demotivate them for grades, life and job seeking, etc. (I) prefer to keep them motivated."

Another panelist said she plans to leave her children $4 million each but will expect them to focus on making their own way.

"Our kids know that they will inherit $4 million each, because that is the state tax exclusion in Illinois," she noted. "Everything (else will) pretty much go to charity. This means my children, who are 21 and 24, need to make their own living. They are motivated to do so."

What other panelists said:

• "I know wealthy families who have split apart because of arguments over money. There are also some who practice false scarcity because they don't want to spoil their children. There has to be a middle ground. I hope our children grow into capable adults who realize their worth is more than money. I hope they utilize their money as a tool to enhance life for themselves and for others."
• "I'm so glad I get to give (my kids) enough to make life comfortable, but not enough to ruin them, because too much money is a curse, I think. … I like knowing that when I die, they'll be able to benefit in some way, and I hope there will be a moment when they sit back and say, 'Thanks, Mom. You were awesome.'"

In the next article, we'll explore how our Millionaires Panel responded to questions about whether an adult child who is an aging parent's caregiver should receive a larger inheritance than their siblings.

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Over the next two decades, an estimated $124 trillion will move from older generations to their heirs, making the Great Wealth Transfer the largest intergenerational transfer of wealth in American history.

Most families with $10 million or more in complex, multigenerational assets that I advise have already done the technical work: Trusts are funded, powers of attorney are current, the generation-skipping exposure has been modeled.

None of that determines whether the transfer actually holds. What determines that is whether heirs understand the reasoning behind the structure, not just the structure itself.

A trust can tell your heirs what to do with what they inherit. It can't tell them why you made the choices you made, and why is usually the piece that decides whether wealth strengthens a family across generations or fails to sustain it in the first one.

A lesson I learned the hard way

Early in my career, an aging family member began showing signs of dementia. He had built real financial success over a long professional career, but he had never married and had no spouse or child positioned to step in.

Because he had never executed a power of attorney or healthcare directive, our family had to petition a court for the authority to help him. I became his court-appointed guardian in my early 30s and served in that role for eight years until he passed away.

What stayed with me wasn't the legal gap itself. It was that someone that accomplished, that educated, still ended up in a public guardianship proceeding over documents that take an afternoon to execute.

Sophistication in your portfolio doesn't protect you from a gap in your authority documents, and I've watched it happen to plenty of clients who assumed their success made them exempt.

Silence is a bigger risk than estate tax

Advisers and clients alike spend enormous energy on exemption planning, basis step-up and trust jurisdictions. It's worth doing, and rarely the reason families fracture after a transfer. They fracture over unexplained decisions.

One heir receives liquid assets. Another receives an interest in the operating business or the real estate portfolio. Absent an explanation of the reasoning, once the person who made that decision is gone, the reasoning goes with them.

Beneficiaries fill the silence with their own narrative, usually one involving favoritism, and that narrative is where litigation and the estrangement start. I call probate the original reality show. Every year in practice reinforces it.

Have the conversation about intent now. If you haven't had the conversation, you're certainly not alone. More than half of parents age 55 and older surveyed by Morning Consult for Kiplinger's Trillion Dollar Talk report say they rarely or never discuss money with their children.

Three moves to make beyond the documents:

Put your reasoning in writing, separate from the dispositive documents. A letter of wishes, kept alongside the trust instrument, isn't legally binding, but it's the piece your heirs will read for context on why the plan is structured as it is.

Convene the family before a crisis forces a conversation. You don't need to disclose account values to communicate priorities, though I recommend making these discussions common and hosting them periodically.

A single structured conversation about intent can pre-empt years of downstream disputes among co-trustees and beneficiaries.

Treat the plan as a living instrument, not a closed file. A plan drafted a decade ago rarely reflects your current family, business interests, or fiduciary appointments.

Revisit it on a real cadence, and reflect on the reasoning behind it, not only the numbers.

Think of your estate plan as a memoir, not a mechanism

I encourage clients to think of an estate plan less as a set of instructions triggered by death and more as a memoir — a document that ties back to the values and judgment you want to carry forward, not one that simply activates on your passing.

That reframing changes the starting point. Instead of beginning with distributions and structures, start with a harder question: What does this family stand for, and has anyone put it in writing where your heirs can find it?

Plans that skip that step have direction and no origin, and a plan built on nothing rarely survives contact with real money, real grief and real responsibility arriving at the same time.

The Great Wealth Transfer is not primarily a legal event unfolding in your attorney's office. It's a human one, moving through legal channels.

The families who come through it intact are the ones who treat it that way from the start.

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

For years, Dolly Parton insisted she didn't want to leave her family with a "mess" after her passing.

She had no children, and her husband of over 50 years, Carl Dean, died in 2025. Because her estate involves much more than basic financial accounts — encompassing her brand, song catalog, theme park, charities, and a large extended family — she took proactive steps.

Following her death on August 25, reports indicate she used trusts, business entities and financial managers to keep the majority of her assets out of public probate court.

Unfortunately, even the best-laid plans can spark a fight where control and loyalty clash with money.

What's happening with Parton's estate

According to court papers reported by The New York Times and other outlets, Parton's longtime manager has sued her nephew and former head of security, Bryan Seaver, alleging he threatened staff and partners and vowed to "destroy the entire brand" unless he was paid.

In the article, Seaver denied threatening anyone associated with Parton's estate and said that his messages had been twisted to portray him as an antagonist. Parton's sister, Frieda, has said the family isn't fighting about the estate. Currently, the manager has requested a restraining order against her nephew.

Most inheritance battles are not about a $450 million empire. Instead, arguments often start with who has control of the estate, whether the inheritance was fair (or unfair), a surprise in the estate paperwork or the fact that no documents exist outlining your plan for the estate.

A new Kiplinger-Morning Consult survey highlights a generational divide in family financial planning: Two in five families have never discussed inheritance, and 30% of parents have no formal estate plan at all.

Ron Gura, co-founder and CEO of Empathy, provides some context based on a survey by the company:

• Less than one-third of families have formal estate plans (31%) or financial plans (30%) in place.
• More than half (53%) say existing estate documents are incomplete, outdated or simply unfindable.
• More than one in four rely on informal or verbal plans, which offer no legal protection and are not formally documented.
• 60% operate with fragmented or no knowledge of their family's financial plans.

While Parton's estate isn't typical, some aspects are similar to every estate: Who gets the house, will the assets be split fairly, who is left in charge and who thought they were promised more than the estate planning documents actually say, for example.

What are the best lessons to protect your estate from post-death fights? Let's break it down.

1. Put your plan in writing

A missing, outdated or half-finished estate plan is likely to spark a dispute, even in the closest of families. That's why it's important to update your estate planning documents every three to five years or after a major life event, such as a divorce.

2. Consider a trust

A will has to go through probate court before most assets can be distributed. That process is public, can take months and can be expensive in the long run.

A funded living trust usually avoids probate for any assets you name in the trust. The trustee can follow your instructions faster and privately, without waiting for a court to approve every step.

3. Specify who is in charge

Someone must carry out your plans after you're gone. But if you don't name an executor, a court or state law might name one for you.

Choosing who is in charge lets you pick an executor who is organized, trusted and able to follow your wishes. That might be a third-party trustee or executor with the authority to change locks, pay bills and follow your plan without waiting for your family to vote.

4. Explain unequal gifts while you still can

Most fights start with "why do they get this or that and not me?" If one child gets the business and another gets cash, explain your reasoning during a family discussion.

Phil Reed, estate and asset protection attorney at Reed Law, says fairness is inevitably the first concern. But fairness and equality aren't the same: "The primary thing to keep in mind when deciding how to divide your estate is communicating the reasons for that decision and having those memorialized in your estate plan specifically."

Read more: Why Leaving an Equal Inheritance to Your Children Could Backfire

5. Write down who gets what

Make a list of "who wants what" for things such as jewelry, artwork, the lake cabin, the '67 Chevy and more, and keep it somewhere safe. Dividing your personal property beforehand can temper fights after you're gone. Dividing it after your passing is often why siblings stop speaking.

6. Keep things private

Kim Hegwood, owner and managing attorney at Your Legacy Legal Care, says that if someone is seeking privacy, a will might not be enough.

"A will must go through probate for it to be enforceable. Depending on the person's wishes, the assets they own, and how they want things to be managed upon incapacity or death, a trust may be the best type of estate planning tool to help keep it from the public eye."

7. No-contest clauses

Hegwood notes that a no-contest clause basically says, "If you challenge this plan and lose, you forfeit what I have left you." It can be a strong deterrent, but only if the person has something to lose. If you disinherit someone, a no-contest clause won't mean much to them.

However, this clause isn't absolute. "In Texas, for example, a court generally won't enforce one against someone with probable cause who brought the challenge in good faith. A no-contest clause discourages frivolous fights, but it does not replace a well-crafted plan," Hegwood says.

Final word on estate disputes

Dolly Parton reportedly took a firm stance: Having seen what happens when celebrities die without a plan, she didn't want that chaos for her own family. Unfortunately, the first public fight after her death wasn't about who got the rhinestones — it was a battle for control.

The lesson? A solid estate plan ensures your assets and healthcare wishes are honored while supporting your loved ones. But as headlines show, things don't always go as planned. While an estate plan can't erase your heirs' grief, it can keep your legacy from turning into a family feud.

Hegwood adds, "We always say the kindest thing you can do for the people you love is to make sure they never have to guess what you wanted. Grief is hard enough without adding a legal fight."

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Gen Xers and millennials are in line to receive trillions of dollars in the Great Wealth Transfer, but first the money must pass to the surviving spouse. Known as horizontal wealth transfer, women will benefit more, as they statistically outlive their husbands by an average of five years.

Of the $124 trillion in wealth expected to transfer hands during the next two decades, $54 trillion will move horizontally to the spouse, according to a 2024 Cerulli Associates report. Once the widow spends money on healthcare, travel and other expenses, what's left will go to the younger generations.

Inheritance of any size might be welcome, given that many Gen Xers and millennials, based on a new survey conducted by Morning Consult on behalf of Kiplinger, don't expect any windfall. That's even though 47% of parents expect to leave a meaningful one.

This gap between expectation and reality highlights a crucial step in the wealth transfer process: The horizontal shift between spouses. Understanding why it occurs and how surviving spouses can plan for it is essential to preserving family wealth for the next generation.

Why the horizontal wealth transfer happens

Making sure your spouse is taken care of usually drives horizontal wealth transfer, but if that's not enough, the tax code offers incentives to stay motivated. The Unlimited Marital Deduction lets an individual transfer an unlimited amount of assets to the surviving spouse free of estate and gift taxes. If the wealth was passed to an adult child or children upon the first spouse's death, it could trigger estate taxes in certain circumstances.

"The typical process is you leave your money to your spouse, and after that it goes to the kids," said Derrick Longo, a wealth adviser at Savant Wealth Management. "But there's no default right answer. It's very specific for every family and situation."

If you're a surviving spouse, do this

In the Great Wealth Transfer, surviving spouses will be the first to receive the wealth; they need to plan now to preserve it later.

Take the so-called widow's tax penalty for starters. This occurs in the year after a spouse dies and the surviving partner starts filing as a single taxpayer. At that time, their tax brackets are reduced by 50%, and the standard deduction is cut in half, forcing them to pay more taxes if they don't plan for it. But if they do prepare, they have options, including:

• If the surviving spouse has dependent children, they can delay filing as single for two years. After that, they might choose to file as head of household.
• They can file a married filing jointly return for the calendar year in which the spouse passed away.
• Space out income-generating events such as retirement withdrawals and Roth conversions from the inheritance.

On the positive side, the surviving spouse gets a big tax break on inherited real estate, stocks and taxable investment and savings accounts. The value of the assets resets to the current market value on the date of death, erasing capital gains built up over the lifetime (known as a "step-up" in cost basis). If you sell soon after, you might owe little to no capital gains tax, depending on state property laws and how the assets were titled.

The surviving spouse can also roll an inherited IRA or 401(k) into their own name, delaying required minimum distributions (RMDs) until they turn age 73 or 75, depending on their birth year. If a child inherits that same account, the 10-year rule usually applies, requiring them to empty the account (and pay the taxes) within a decade.

Manage healthcare to preserve future wealth

Expected drains on future generations' inheritances include long-term care and healthcare costs. In Kiplinger's survey, 24% of parents fear these costs will erode their wealth.

It makes sense. Fidelity estimates the average 65-year-old will spend about $185,000 on healthcare in retirement, and that doesn't include long-term care, which can get expensive. The average annual cost for a private room in a nursing home was $129,575 in 2025, while an in-home aide cost $80,080. Money once earmarked for the kids can quickly become money spent on aging without the proper planning.

When it comes to covering healthcare expenses in retirement, surviving spouses can take out long-term care insurance, self-fund future healthcare expenses from their savings, health savings accounts (HSAs) or investments.

Which option makes sense for you depends on your health, longevity and finances.

For instance, long-term care insurance might make the most sense if:

• You can afford the premiums.
• Your family or trusted friends can handle the paperwork and claims process for you.
• You crave peace of mind that comes with insurance.
• You're healthy enough to meet underwriting guidelines.

Meanwhile, self-funding your long-term care needs might make the most sense if:

• You're healthy.
• Your family health history is largely free of chronic or heritable debilitating illnesses.
• You've saved enough for your retirement.
• You have liquid assets you can access easily without triggering major tax consequences.

Figure out how to spend to keep the estate growing

An inheritance can bring a desire to spend more, but to ensure the surviving spouse has enough to go around, a retirement spending strategy is essential to the planning process. Spouses can use several withdrawal strategies beyond the traditional 4% rule, including the bucket approach, the flooring strategy and a delayed Social Security collection plan, among others.

If you need help staying disciplined and want to worry less because you know where your money is and how much you can spend, the bucket approach might be for you.

If you want a steady monthly income or are hesitant to spend because of stock market fluctuations, the me-first or flooring method of spending might be for you.

For surviving spouses who want to maximize cash flow later on, the delaying Social Security strategy could be the best approach.

The idea is to find a plan that matches you and stick to it. That will ensure you have enough money to live your ideal retirement and have some left for the remaining heirs.

Plan today to preserve for tomorrow

The horizontal wealth transfer is the first stop of the Great Wealth Transfer, and it's set to benefit women primarily. With $54 trillion expected to pass to surviving spouses, that's a lot of money to protect, preserve and grow.

The good news is the next-in-line spouse doesn't have to wait until their partner is gone to prepare. A little foresight now can help ensure the windfall lasts for generations to come.

More Trillion Dollar Talk

• How Real Families Are Handling The Great Wealth Transfer
• The $124 Trillion Great Wealth Transfer: Fact vs Fiction Quiz
• Could You Handle a Sudden Windfall?
• Before You Leave Your Home to Your Children, Ask These Questions

Being named an agent in a financial power of attorney is often viewed as a simple legal formality, but stepping into the role of a financial agent is a serious, hands-on job.

Beyond signing checks, an agent assumes strict fiduciary duties that demand meticulous recordkeeping, clear communication and a solid grasp of some complex administrative rules.

From overcoming bank pushback and family friction to managing Social Security rules and healthcare premiums, navigating the day-to-day reality of this role requires equal parts legal awareness and practical strategy.

This essential document is missing from too many estate plans. Of the 46% of people surveyed who have an estate plan, only 14% had a financial power of attorney (POA, or FPOA for financial), according to a report from Trust & Will.

What is a financial power of attorney?

A financial power of attorney (FPOA) is a legal document that authorizes someone else — known as an agent or attorney-in-fact — to make financial and property decisions on behalf of the principal.

The person creating the POA is called the principal. When someone names you FPOA, it does not mean giving up control of their own money or legal rights; it simply creates a legal concurrent authority for you, their agent, to manage financial matters according to their best interests.

The type of POA the principal chooses dictates when it takes effect:

• A durable power of attorney gives the agent financial access as soon as it is signed and stays active when the principal becomes incapacitated, ensuring immediate help during an emergency.
• A springing power of attorney, on the other hand, remains inactive until a doctor officially certifies in writing that you are unable to manage your affairs, which protects your control while healthy but can cause delays when urgent financial decisions are needed.

"A financial power of attorney is part of making sure the people you trust can easily step in if something happens to you. It’s a fantastic tool that helps limit uncertainty when your loved ones need it most," Heather Zack, senior vice president of Private Client Services at the Carson Group, told Kiplinger.

Your legal duties as a financial agent

When you're designated as a financial agent, you assume fiduciary duties, which is the highest legal standard of trust and care. An agent is legally required to:

• Act in their best interest: You must make decisions that benefit them, not yourself.
• Avoid conflicts of interest: You cannot mix your funds with their personal bank accounts (known as commingling) or use their assets for personal gain unless explicitly permitted by the document.
• Keep detailed records: You must track every transaction, receipt and decision made using the POA.

Important limitations of a FPOA

Possessing a financial power of attorney isn't a full access pass to the principal's finances, nor does it give you the right to enrich yourself. Your fiduciary responsibilities require you to put their interests first.

Two glaring limitations to your authority are the inability to access Social Security or Medicare accounts. If you're charged with paying their healthcare expenses and they are enrolled in Medicare, you will need additional forms completed and filed to grant you the necessary authority.

Here are three important limitations you need to know:

1. Does not override the principal. As long as the principal is competent, their decisions can override those of you, the agent. The principal can also revoke the POA at any time.
2. Ends automatically at death: A financial POA loses all legal validity the moment the principal passes away. At that point, the executor named in a will or a court-appointed administrator takes over estate management.
3. Medical decisions are separate: A financial POA strictly covers property, money and legal matters. Health care decisions require a separate medical power of attorney (or healthcare proxy).

How to access Social Security and Medicare accounts

The rules are different when it comes to accessing Social Security or Medicare accounts. If you're responsible for paying for their healthcare, access to their Social Security account is critical. Even if there is a financial or health power of attorney or you share a bank account with a son or daughter, it's not enough.

The easiest way to designate someone as a representative payee is through direct electronic submission in your my Social Security account. Otherwise, you can start the process by calling the SSA at 1-800-772-1213 (TTY 1-800-325-0778 if you are hearing impaired) or visiting your local SSA office.

To access the Medicare account of your parent or loved one, you'll need the Medicare patient to execute an Appointment of a Representative (Form 1696) and Authorization to Disclose Personal Health Information (CMS-10106) (PDF). You can complete and submit the form online, or print a PDF copy and send the completed form to: 1-800-MEDICARE Written Authorization Dept. PO Box 1270, Lawrence, KS 66044.

For more detailed information about how these appointments work, read: Secure Your Social Security: The Essential Role of a Representative Payee and How to Access Your Parents’ Medicare: Enroll and Manage Their Care.

Common administrative and financial hurdles

While serving as a financial agent under a POA is a significant responsibility, agents often face administrative, legal and interpersonal hurdles when trying to carry out their duties.

"Many financial institutions have their own review processes for powers of attorney, and some may even require additional paperwork before letting you take any action. Even when a POA is legally valid, banks, brokerages, and other financial firms often want to verify the document to confirm it meets their internal requirements," Zack explained.

Below are examples of the resistance you might meet and where.

Best practices to minimize friction

Even with a legally valid power of attorney in hand, navigating banks, family dynamics and record-keeping can present unexpected challenges.

"Whenever possible, it makes sense to have those conversations in advance. Many institutions will review or note a power of attorney before it’s needed, and addressing questions ahead of time can reduce friction during an emergency," Zack told Kiplinger. She emphasized that "estate planning shouldn't be a 'set it and forget it' exercise. One of the most important parts of planning is making sure the documents you have will actually work when you need them."

You can head off most of these problems before they start by following a few essential best practices:

• Preclear documents: Work with the principal’s primary banks and investment institutions to submit and approve the POA document before an emergency occurs.
• Keep strict separation: Maintain completely separate bank accounts for the principal, and keep detailed records, receipts and logs for every transaction.
• Communicate transparently: Provide regular financial updates or accounting summaries to immediate family members or co-beneficiaries to prevent suspicion and resolve misunderstandings early.

Financial power of attorney is a worthwhile duty

When an aging parent or relative grants you financial power of attorney, they're placing immense trust in your ability to manage their life's savings, pay their bills and protect their assets. However, many new financial agents are caught off guard by the bureaucratic roadblocks, strict fiduciary standards and unexpected conflicts that arise once they begin acting on the principal's behalf.

Understanding your legal authority — and where agency rules such as Social Security's Representative Payee system take over — is key to managing their finances smoothly and protecting yourself from personal liability.

Related Content

• How to Access Your Parents’ Medicare: Enroll and Manage Their Care
• Secure Your Social Security: The Essential Role of a Representative Payee
• Filing a Deceased Person's Final Income Tax Return
• You Were Made a Trustee. Now What?
• What to Do When You're the Executor of an Estate

Trusts are a common estate-planning tool, and with trillions of dollars expected to change hands as wealth moves from one generation to the next now and in the coming years, various trust types and the tax rules surrounding them are getting more attention.

But that might not be a good thing if the IRS is taking a second look.

In a current high-profile case, the tax agency is challenging how one family used an irrevocable trust strategy to pass wealth to their children.

Although the dispute involves a specialized trust arrangement, its potential broader lesson is worth watching for anyone using high-value trusts in their estate plan. Here's more to know.

IRS challenges irrevocable trust tax strategy

The current case involves Nashville residents, the Elcans. The IRS is seeking more than $736 million (roughly $614 million in gift taxes and $122 million in penalties), arguing that the couple's use of three irrevocable trusts didn't qualify for the intended tax treatment.

A little background according to court filings:

• In 2018, Mrs. Elcan set up three grantor-retained annuity trusts (GRATs) to pass wealth to the couple's three children. The two-year irrevocable trusts were funded with marketable securities and closely held business and partnership interests.
• As is typical with GRATs, the trusts made fixed annual payments back to the grantor, while investment growth above a set benchmark passed to the children tax-free.
• The strategy yielded roughly $200 million tax-free for their heirs across two of the trusts.

The trust agreements also contained a "substitution power" that allowed the grantor to swap personal property into the trusts to retrieve original trust assets of equal value. The grantor reportedly used that power to pull investments out of the trusts and replace them with promissory notes — essentially IOUs promising to pay the trusts back with interest.

The trusts used the promissory notes to satisfy the required annual payments, effectively canceling amounts the grantor owed the GRATs.

After auditing the arrangement, the IRS issued a notice of deficiency demanding more than $730 million in gift taxes and penalties.

According to court filings, the agency argues that using the personal promissory notes to satisfy the GRAT’s required annuity payments didn't comply with the rules governing qualified annuity interests.

• Specifically, the IRS contends that the arrangement violates Section 2702 of the Internal Revenue Code and Treasury regulations that prohibit GRATs from issuing notes to satisfy annuity payments.
• The agency argues that swapping personal IOUs into the trust, then returning them to cover the required payment was essentially an indirect step transaction designed to bypass the rule.

If that position prevails, the IRS could treat the entire $687.5 million initially transferred to the GRATs as a taxable gift.

Note: The federal gift tax generally applies when someone gives wealth to another person without receiving equal value in return. Certain estate-planning strategies can help limit how much of a wealth transfer is treated as a taxable gift when a trust is created.

However, the taxpayers maintain they followed the letter of the law because the trust didn't issue new debt to pay the annuities. Rather, they argue, the existing notes were already trust assets that were legally returned to satisfy the payment obligations.

*The case is Elcan v. Commissioner (Tax Court Docket No. 3405-25). The Tax Court hasn't yet ruled on the taxpayer's motion for summary judgment.

What is a grantor retained annuity trust, and how does it work?

A grantor retained annuity trust is an irrevocable trust designed to transfer future investment growth to beneficiaries while allowing the grantor to receive annual payments from the trust for a set period.

The strategy generally works like this:

• A grantor transfers assets to a GRAT and reserves the right to receive annuity payments during the trust term.
• The IRS uses a monthly interest rate (the Section 7520 rate or "hurdle rate") to calculate the present value of the grantor's retained annuity payments.
• If the trust's assets grow faster than the hurdle rate, the excess appreciation can generally pass to the trust beneficiaries at the end of the trust term tax-free, depending on how the GRAT is structured.

But … if the assets don't appreciate as expected, there might be little or nothing left to pass to beneficiaries after the required payments are made, and the grantor receives their principal back through the annuity payments.

In this case, if the U.S. Tax Court agrees with the IRS, the tax treatment of the original transfers could change, potentially making the full value transferred to the GRATs subject to federal gift tax.

A ruling for the IRS could also clarify how similar GRAT arrangements are treated going forward and potentially affect other taxpayers who have used similar strategies.

Trusts and estate planning: Bottom line

The Elcan case (still pending), is a reminder that details matter when using a trust or other potentially high-value estate planning strategies. How trust assets are moved, exchanged, or substituted over time can attract IRS attention.

In this instance, the Tax Court's eventual ruling could provide more guidance on grantor trusts and substitution transactions.

Regardless, always review estate plans periodically and have an estate-planning attorney and tax professional review significant transactions in advance.

Related

• Which Trust Type is Best for Your Heirs?
• Gift Tax Exclusion for 2026
• How Much of Your Inheritance Actually Gets Taxed?
• Capital Gains Tax ETF Strategy Catches Treasury's Attention

When drafting an estate plan, many people treat choosing an executor as a sentimental decision — a way to show trust or single out a reliable loved one. But serving as a personal representative is far more than a gesture of respect; it is a demanding, multi-year administrative and financial job. From navigating probate courts and liquidating real estate to settling final tax liabilities and resolving family tensions, an executor carries real legal responsibility during a time of grief.

To ensure your estate is settled smoothly and your legacy is protected, you need a clear strategy to identify, evaluate and formalize the right choice before you sign your legal documents. "When you name someone as executor, you may effectively be giving them a second job they never applied for," David Haughton, vice president of estate planning at Carson Group, told Kiplinger.

Here are six steps to help you choose the right person (or people) to be your executor.

1. Understand the scope of duties

Ensure you know what you are asking someone to take on. An executor manages probate, locates and values assets, settles debts, files final federal and state tax returns and distributes remaining assets to beneficiaries. The role requires meticulous record-keeping and the ability to deal with court timelines and administrative friction. Understanding what the job entails will help you select the right person.

"I think what surprises executors most is how much more is expected from them beyond simply distributing assets," said Haughton. "It can be a significant time commitment, and the executor is expected to follow the documents and act in the estate’s best interest, even when the family’s expectations differ."

State law typically allows executors to claim reasonable fees paid from the estate. You should decide whether you want to specify compensation terms in your will or default to the statutory amount.

2. Identify potential candidates

Consider both personal contacts and professional options. When selecting an executor, you generally have three choices: A personal representative, such as a family member or friend; a corporate executor; or co-executors.

Because executors face personal liability for fiduciary errors or premature distributions, candidate selection must prioritize capability over sentimentality. Haughton advises that "you want someone who is organized, dependable, financially responsible and able to communicate calmly."

Potential red flags? He said someone with "unresolved family conflict, poor financial judgment or someone whose own circumstances may get in the way" would not be a good candidate.

Most people choose family members due to deep mutual trust and shared personal history. Often, the oldest child will be selected. However, Haughton stresses that just because a child is the firstborn doesn't mean they are necessarily a good fit for the role of executor.

Co-executors within families: Naming two people to act together — for example, two siblings — can lead to administrative deadlocks and delays unless they work exceptionally well together. A trusted friend might offer a layer of separation while maintaining a personal connection to your wishes.

Co-executors, personal and professional: Appoint a trusted friend/family member and a corporate fiduciary to act jointly. The personal representative provides insights into family wishes, while the institution manages the administrative heavy lifting. Read more about corporate executors below.

The hybrid alternative: Co-executors or directed fiduciaries

If you want the personal touch of a loved one combined with the legal weight of a professional, you do not have to choose strictly between the two. While family members often serve out of love and obligation, a professional brings fiduciary expertise, objectivity and operational continuity.

Appointing a corporate executor, including banks, trust companies and estate attorneys, is ideal for large, complex estates, business transfers or situations where family conflict is likely.

Most importantly, Haughton said that there should be a "reason to have both." He points out that it "can be a good thing when you want checks and balances or different perspectives, but it can also slow down decisions and create disagreements."

You should consider including a corporate executor under these circumstances:

• High potential for family conflict. Sibling rivalry blended families, disinheritance and unequal inheritances.
• Complex financial structures and high net worth. Tax exposure, illiquid/diverse assets and ongoing trusts.
• Closely held businesses or active operations. Managing or selling a family business upon the owner's death requires specialized business continuity expertise.

3. Evaluate essential traits and possible constraints

Assess candidates against the practical needs of your estate. Your executor must meet the specific criteria of the state where you live, but general requirements across state lines typically include age, citizenship, residency and legal capacity. Additionally, a felony conviction is often a disqualifying factor.

Be sure that your choice is at least 18 years old, of sound mind — that is not judged incapacitated by a court — and lives in-state. Out-of-state executors are often allowed if they appoint an in-state agent or post a bond.

Here are some factors to consider when choosing a family member or friend to serve as an executor:

• Location and proximity: A local executor can more easily inventory physical assets, handle mail and attend probate court hearings.
• Financial competence: They do not need to be a CPA or attorney, but they must be comfortable hiring professionals and managing accounts.
• Emotional neutrality: Choose someone who can remain objective and fair if family tensions or beneficiary disputes arise.
• Age and health: Ensure the candidate is likely to have the cognitive and physical capability to serve when needed.

4. Have a candid discussion before naming the executor

Never surprise someone with an executor designation. Sit down with your chosen candidate to outline your expectations, the general structure of your assets and where documents are stored.

Confirm they are willing and ready to accept the fiduciary responsibility. Serving as an executor is voluntary, and a court cannot compel someone to serve if they renounce the appointment.

Schedule a dedicated conversation to outline your estate's structure, the types of assets involved, and the general complexity they will encounter. Be transparent about your intentions regarding asset distribution — especially if your plan includes trusts, unequal inheritances, or specific conditions — so your candidate understands the interpersonal environment they will step into.

This conversation gives your chosen candidate a clear, pressure-free opportunity to accept the role or respectfully decline.

5. Designate a successor executor

Always establish a backup option. Life circumstances change. Name at least one alternate executor in case your primary choice predeceases you, becomes incapacitated, or declines to act when the time comes.

• The primary alternative: Name at least one primary successor executor in your will. If your primary choice predeceases you, suffers cognitive decline, moves abroad or resigns when the time comes, the court automatically appoints the successor without requiring a lengthy court hearing.
• Tiered succession and corporate backstop: For long-term security, name a named individual as primary, a secondary individual as first alternate, and an institutional trust company as the final contingent backstop. This prevents the court from having to appoint an unknown administrator of its own choosing.

6. Formalize the appointment and create an accessible operational plan

Make the choice legally binding. Your choice of executor carries no legal authority until it is properly executed in a valid last will and confirmed by the probate court following your death.

Work with a qualified estate planning attorney to draft your will, ensuring it explicitly grants your executor the necessary authority to handle some decisions, such as the authority to sell real estate, manage digital assets and retain legal or financial counsel without requiring prior court approval for every transaction.

Include specific language waiving executor bond requirements if you trust your candidate implicitly, which saves the estate thousands of dollars in premium fees. Finally, store your original signed documents safely and give your executor clear instructions on where to access your will, account inventories and essential property keys when needed.

Use your head, not your heart

Ultimately, the best executor for your estate is not necessarily the relative you feel closest to, but the person most qualified to handle the legal weight, administrative burden and interpersonal dynamics of the role. "People spend a lot of time thinking about who they trust and sometimes not enough time thinking about what they’re asking that person to do," Haughton cautioned.

Taking the time to evaluate candidates objectively, discuss your expectations openly and formalize clear primary and successor choices will save your heirs immeasurable stress and cost down the road.

Once you've made your selections, review your designations every few years or after major life changes to ensure your estate plan stays aligned with your wishes and ready for the future.

Related content

• Is Your Estate at Risk? The 5 Trusts You Need to Understand
• Probate: The Terrible, Horrible, No Good, Very Bad Side of Estate Planning
• Why Leaving an Equal Inheritance to Your Children Could Backfire

In the coming years, older generations — primarily baby boomers — are expected to pass tens of trillions of dollars to their heirs in what's colloquially known as the "Great Wealth Transfer." But cash and stock portfolios aren't the only assets changing hands.

A recent Kiplinger survey found that real estate accounts for about one-third of everything parents expect to leave behind.*

Yet, as houses are passed to the next generation, a surprising amount of uncertainty surrounds what happens next. The same study revealed that 43% of parents and 33% of heirs are left guessing about potential tax bills.

On the surface, inheriting a home comes with significant tax advantages designed to protect against capital gains tax — most notably, the "stepped-up basis" rule. Securing that protection often requires an accurate baseline value, whether through a date-of-death valuation or a retrospective appraisal.

By understanding how tax authorities calculate true property value, where the hidden pitfalls lie and discussing the future with your family, you can safeguard both your financial legacy and their peace of mind.

*Note: Conducted by Morning Consult on behalf of Kiplinger, this survey included more than 5,100 adults age 25 and older. All adult child respondents had at least one living parent, and all parent respondents had at least one child age 18 or older.

How the IRS values an inherited home

When passing a house to the next generation, a home's tax basis typically resets to the property's fair market value (FMV) as of the owner's date of death.

Because the baseline "steps up" to this new standard, heirs who sell the home shortly after inheriting it usually owe little to no federal capital gains tax.

However, whether heirs sell immediately, rent the property or wait years to sell, documenting the home's date-of-death value is essential to claim the stepped-up basis on future tax returns. (If an estate has a federal tax return, executors might be allowed to value the house six months after the date of death).

Unfortunately, when reporting a property's value on tax returns or estate disclosures, families can make the mistake of using one of two incorrect methods:

1. Property tax assessments. Local assessors determine values for property tax purposes, often using automated algorithms, valuation caps, or (at worst) outdated information. Because these figures are usually significantly lower than actual market value, using them might shrink your home's taxable baseline — exposing your heirs to unnecessary capital gains tax rates if they eventually sell.
2. Comparative market analyses (CMAs). A real estate agent's opinion or online estimate offers a helpful starting point for listing a home, but it lacks the formal, standardized methodology that federal tax law requires. As a result, the figure provided might not withstand IRS scrutiny.

To establish an official stepped-up basis for a property you plan to hold, rent or keep long-term, the general IRS "gold standard" requires a formal, qualified appraisal conducted by a licensed or certified real estate appraiser who specializes in retroactive "date-of-death" valuations.

What should an inherited home appraisal look like?

From the IRS point of view, a perfect appraisal occurs on the day of death. In reality, estate administration, probate and the natural grieving process mean months — or years — can elapse before anyone addresses the tax baseline.

That's where a retrospective (or retroactive) appraisal comes in.

Qualified appraisers can evaluate the home today and use historical market data, past comparable sales and public records to determine what the property was worth on a specific past date.

For the IRS to accept the report, the valuation must meet specific criteria:

• Professional credentials. A qualified appraiser with a recognized professional designation and verifiable real estate experience. The valuation must also adhere to the core principles and substance of the Uniform Standards of Professional Appraisal Practice (USPAP®).
• Detailed scope. The report should include specific important information, such as the exact valuation date, localized market comparisons leading up to that date and an analysis of the home's physical condition at the time.
• As-is condition. Reflects whether the property was pristine, outdated or in need of repair. Ideally, the home should not be renovated, repaired or staged before the appraiser documents its baseline state to ensure an accurate date-of-death valuation.

Formal inherited home appraisals typically range from $500 to $1,500 and might vary depending on such factors as area, size or property complexity, according to industry cost guides. Compared with potential tax liabilities and penalties, this can be a modest investment in protecting your estate (more on those later).

Quick sales of inherited homes

Do you always need a retrospective appraisal? No.

For heirs selling an inherited property within a six- to 12-month window in an open-market, arm’s-length transaction, the IRS and the U.S. tax court frequently accept the actual closing price as strong evidence of the date-of-death fair market value.

• This might make a separate date-of-death appraisal unnecessary for federal tax reporting, provided that local market conditions remained stable and no material alterations were made to the property during that time.
• If your heirs must file an estate tax return, tax experts generally recommend obtaining a formal retrospective appraisal to establish a stepped-up basis.
• A formal appraisal is often required to complete local probate court inventories. It could also serve as vital, objective documentation to protect the heirs if the IRS audits the tax basis or if beneficiaries dispute the asset's value.

Related: The Estate Tax Exemption Amount for 2026

The cost of an improper valuation

If the IRS audits an estate or personal tax return and finds an unverified or inflated property basis (resulting in a tax underpayment exceeding $5,000), the financial consequences for heirs can be steep.

Beyond paying back the original capital gains tax, the IRS imposes accuracy-related penalties:

• A 20% substantial valuation misstatement penalty. Applied to the tax underpayment if the reported basis is 150% or more of the actual FMV.
• A 40% gross valuation misstatement penalty. Doubled if the claimed basis is 200% or more of the true market value.
• A 20% consistency penalty. Applied automatically if a larger estate files a federal estate tax return, and an heir claims a higher basis on their individual tax return than what the estate declared.
• Compounding interest. Applied retroactively to both back taxes and penalties from the original tax filing due date.

Note on stacking: The IRS does not stack these three penalties on top of each other for the same pool of money; usually, the federal tax agency applies the single highest applicable rate (capped at 40% for a gross misstatement) plus the compounding interest.

Starting the conversation today

Discussing estate plans can feel daunting. The Kiplinger survey shows that talking about inheritance ranks among the most uncomfortable topics for both parents and heirs — more than politics and even end-of-life wishes.

But approaching the conversation thoughtfully today might help remove confusion during what will likely be an emotionally tumultuous time.

Here are a few steps to take now to ease the process of passing down an inherited home:

• Identify a certified appraiser. If your heirs plan to keep or rent the home, research reputable, state-certified appraisal firms in your area so your heirs have a trusted professional to call when the time comes.
• Organize household records. Maintain a designated folder with home improvement receipts, closing documents and property deeds. Remind heirs to keep records of appraisal fees and closing costs. These documents might help prove the home's tax basis (repairs generally do not add to the basis).
• Clarify the taxes. Many heirs incorrectly assume inheriting a house triggers an immediate, overwhelming tax bill. Explaining how the stepped-up basis works — and how you're setting them up to use it — can help them understand the financial picture more clearly.

By taking these small steps today, you do far more than shield your children from tax headaches and audit risks — you give them space to process their grief without the weight of financial uncertainty.

Estate planning is ultimately an act of care, and properly protecting your home’s value ensures your legacy remains the true gift you intended it to be.

This article does not cover state income tax and is for educational purposes only. The content does not constitute financial, legal, or tax advice. Talk to a trusted tax professional when necessary.

Read More

• About 40% of Heirs Say They Can’t Afford an Inherited Home
• How Inheritance Actually Gets Taxed: From Stepped-Up Basis to IRA Rules
• States That Won't Tax Your Death

The "Great Wealth Transfer" is shifting trillions of dollars between generations, but for many families, it is sparking a silent crisis. Despite the high stakes, inheritance remains a taboo subject — often more difficult to discuss than even dating.

This silence carries a heavy price: It opens the door to misunderstandings that can fracture sibling relationships during times of grief. To protect your legacy and maintain family harmony, it is time to move beyond silence.

Proactive, collaborative planning is the key to preventing conflict. If you're unsure where to begin, here are actionable tips from experts to help keep your family on the same page.

1. Break the ice creatively

Talking about estate planning is weird, especially if you have other siblings. The last thing you want to contemplate is the loss of a loved one; adding financial logistics to the mix can make an already uncomfortable conversation feel even more daunting.

However, there are easy ways in. Lindsay Bryan-Podvin, licensed master social worker (LMSW), financial therapist and founder of Mind Money Balance, told Kiplinger, "Be creative when opening the door to that kind of conversation. One jumping-off point could be a friend dealing with a parent passing away and all the hoops they had to jump through to settle the estate."

"This can open the door to asking if everything is in place." Podvin also recommends this become a conversation you have with other siblings and parents multiple times. "Keep in mind that each person might remember things differently when you chat, so having multiple conversations ensures everyone is on the same page and concrete details are ironed out."

This checklist can help you get the talks started:

• Schedule a time to talk with all siblings and parents in a distraction-free environment
• Ask open-ended questions, like, "What is your vision for your legacy?"
• Discuss crucial details, such as payable-on-death beneficiaries, funeral arrangements and estate plans.
• Acknowledge the emotional weight — both yours and your parents'.
• Establish a regular check-in cadence to keep the conversation open.

Before beginning, knowing how generations view money can help you understand others' perspectives.

2. Understanding the generational disconnect

Maggie Baker, Ph.D., financial psychologist and author of Crazy About Money, told Kiplinger that she believes older generations used to think it was a taboo topic to discuss.

That generational divide becomes clearer in a Morning Consult survey commissioned by Kiplinger as part of our Trillion Dollar Talk campaign, which found that adult children would rather talk to their parents about almost anything besides inheritance, including politics, their parents' physical and mental health, and when they'd be getting married or having kids. The survey also found that parents plan to split the inheritance evenly, while kids prefer to split it differently.

Failing to discuss estate plans in concrete terms can create confusion later, especially when children are left to sort through documents and piece together their parents' wishes. What parents intend, and what they write down, can be difficult to parse.

An omission can be the focal point that drives division between siblings, where natural rivalries can already occur. That's why a change of approach can make all the difference when discussing inheritance. Instead of thinking of it merely in dollars and property, shift the focus to living legacy. What do you want your inheritance to communicate to your loved ones?

On this front, Baker recommends creating an ethical will. This ensures parents share their values about money with children so they can have trust and assurance.

Doing this can shift the focus away from talking about money only, which can be a taboo topic for older generations, and toward actionable strategies to ensure a living legacy they would be proud to bestow. Planning is vital now because when that day comes, grief can cloud clarity.

3. Prepare for the 'fog of grief'

Losing a loved one can be a surreal and extremely stressful experience. It impacts your physical, emotional, relational, spiritual and cognitive lives. It can make even simple things such as doing the laundry or cooking dinner seem like insurmountable tasks.

Another aspect that can add stress and sibling division, if not already planned, is end-of-life expenses. Podvin recommends, "Have a savings account earmarked for funeral expenses. Since it can take estates 12 to 18 months to settle, this prevents you or other siblings from going into debt to pay for the expense."

Here is my recommendation when searching for savings accounts:

Talk to your parents about designating one or more siblings as a payable-on-death (POD) beneficiary. Upon the loved one's death, the bank will release the funds to that beneficiary, who can use them to pay for funeral and other expenses as they arise without having to go through probate.

It's also important to take some time to heal. Grief can manifest itself in many forms, but so can comfort. One effective strategy is "body doubling" — asking a friend to accompany you on a walk or lunch. This simple presence can help you absorb their energy, reducing some of the stress and pain.

As you come together as siblings to make decisions, don't overlook this one component.

4. Address inequality and resentment directly

When you discover how your parents or older loved ones divided assets and cash, it could make one or more siblings feel overlooked. This is why it's important to share how you feel without attacking anyone else.

To demonstrate, if an aging parent falls ill, one sibling likely serves as a caretaker. One way to support someone who's already been stressed in that situation is for the other sibling(s) to acknowledge the caregiver's work.

Podvin recommends, "Make sure to give them a token of your appreciation. One way to do this could be paying for a trip so they can go away and relax after all the work they did or give them some money to help offset the work they missed while helping the loved one."

Regarding the difficulty of processing these feelings of missing out or anger, Baker suggests, "You should call on a financial therapist. Especially if you're hearing echoes from the grave. You can't resolve it because the person isn't there. With a therapist, they have an idea of how to stop the rumination."

Ultimately, direct communication between siblings and parents can help to eliminate many of the conflicts caused by inheritances. By finding creative ways in, ironing out concrete details in advance and sharing/acknowledging when one sibling has done more work than the other, it can reduce tensions from arising at a time when you should be coming together.

As parents, opening the door to this conversation also ensures you're leaving an inheritance that reflects your values and legacy.

If you expect to receive an inheritance, speaking with a financial adviser can help you make plans to maximize your wealth and achieve your financial goals while keeping in mind your relative's values, so you're not overwhelmed when you receive it.

Use the tool below to connect with a vetted financial professional who can help:

More Trillion Dollar Talk

• Manage an Inheritance Like a Pro in Just 7 Steps
• Keep, Sell, or Rent? What Happens Tax-Wise When You Inherit a House
• What Happens When You Inherit a House — With Your Siblings
• Why Leaving an Equal Inheritance to Your Children Could Backfire

When celebrating a major moment — a big birthday, graduation, marriage — no one wants to consider the financial implications.

But it could be a costly mistake not to take some time to figure out how each life milestone could impact your life savings.

I'm not suggesting leaving the party early. But afterward, find out what, if anything, you should do as a result of having a teenager, getting married or turning another year older.

Here are 11 significant life events and financial considerations for each, coming to you from the vantage point of an experienced senior wealth adviser at Carnegie Private Wealth.

1. When your child turns 13

There's no need to throw cold water on your new teen's celebration but having a 13-year-old means that your Child and Dependent Care Credit expires on the big day.

You'll need to adjust your tax withholdings, stop using pretax Dependent Care Flexible Spending Account (DCFSA) funds for that child's care (any expenses incurred on or after the 13th birthday are ineligible) and prepare for higher out-of-pocket costs for such things as after-school care and summer camp.

Thirteen is when your child becomes eligible for teen-specific bank accounts, which is convenient, since it's also when they can start earning independent income. That's an opportunity to drive home the money lessons you've been teaching up to now.

Money in a piggy bank isn't earning interest. Money in a real bank can. If you want to get serious about saving, consider a brokerage account for your teen.

2. Graduating from high school/turning 18

This is when parents can transfer full control of custodial accounts to their (now adult) child.

At 18, you have the legal right to sign independent financial contracts, open standard bank accounts and apply for credit cards without a co-signer.

Your 18-year-old should already understand the value of saving and the slippery slope credit card debt can be. Does your young adult understand how credit cards affect their credit and the importance of paying off the balance each month?

Before they head to the bank to apply for what might look like "easy money," impress upon them what an 18% to 22% interest rate means — and that building a good credit history is going to make life a lot easier.

3. Graduating from college/starting a first job

You'll need a budget that includes an emergency fund. Saving for long-term goals is important, too, but don't lose sight of the immediate future. A flat tire, a visit to urgent care, reduced work hours or a layoff are all reasons to keep some of your savings readily accessible.

Continue building a solid credit history. If you took out student loans, paying them back should be a priority.

4. Getting married

First, have honest discussions about your current financial standing. Discuss attitudes toward debt. It's very important to sign a prenup.

Becoming a two-income household means it's time to update your budget.

• Maximize your savings
• Decide if you'll have a joint account or separate
• Determine who's paying the bills
• Start a financial organizational system so passwords and account information are safely stored but accessible to you both

Either of you should be able to step in and handle the other's financial "job" if necessary.

5. Having a baby

Along with sleepless nights, you're about to encounter sticker shock over the price of diapers, formula, baby food and everything else little humans require.

But you'll be so enamored with your baby, you'll hardly notice. Now's the time to:

• Open a 529 college savings plan
• Add Junior to your health insurance
• Consider buying life and disability insurance
• Update your will — or get one, if you haven't yet

6. Buying a first house

Time for another new budget. While you're building equity as you pay down your mortgage, you'll also want more cash on hand for the inevitable home repair — because when the HVAC goes out, there's no landlord to call.

Set aside money for maintenance and repairs so an expensive surprise doesn't have to go on a credit card.

7. Turning 50

In my experience, that's when people really start to get serious about firming up retirement planning. It's a good time to evaluate: Do I have enough? And if I don't have enough, what do I need to do to catch up? There's still plenty of time.

8. Turning 65

The Medicare birthday is a big one. You can stop worrying so much about the health insurance burden and shift your thinking to long-term care. Talk to your financial adviser about where to invest the money, you're suddenly not having to spend on health insurance premiums.

9. Turning 75

Depending on when you were born, you might already be taking required minimum distributions (RMDs) from tax-deferred retirement accounts. RMDs generally begin at 73, but the starting age rises to 75 for people born in 1960 or later.

The government eventually requires you to start taking money out of most tax-deferred retirement accounts, and those withdrawals generally count as taxable income.

Talk with your financial and tax professionals about what you're required to withdraw and what to do with money you don't need for living expenses. If charitable giving is important to you, ask whether qualified charitable distributions make sense.

Between 75 and 80 is also when seniors — and their adult children — need to think about quality of life. Community is important as we age. I believe what keeps people excited about life is having friends and something to look forward to.

Loneliness and isolation are devastating to health and well-being. If you don't have people you enjoy spending time with, all the money you set aside for retirement is going to waste.

• Try a new hobby
• Get outside
• Make time for old friends and cultivate new ones

Your longevity depends on it.

10. When you become a grandparent

If you're able to help pay for a grandchild's education, a 529 plan is often a great place to start. The money can grow tax-free, and withdrawals are generally tax-free when used for qualified education expenses.

Before you start writing checks, think about your family as a whole. If one adult child has children and another doesn't, consider whether your giving creates an imbalance you didn't intend. Fair doesn't always have to mean equal, but it should be intentional.

11. Death of parents/inheritance

Receiving an inheritance can be emotional as well as financially complicated, so resist the urge to make major decisions immediately. Start by understanding exactly what you inherited — cash, taxable investments, retirement accounts, real estate or other assets — because different assets come with different tax rules.

You'll want to work with a CPA and your financial adviser before selling, moving or withdrawing inherited assets.

For example, inherited property generally receives a new cost basis based on its fair market value at the owner's death, while many non-spouse beneficiaries of inherited retirement accounts must empty those accounts within 10 years and might have distribution requirements along the way.

Before spending an inheritance, consider how it could strengthen your own financial future.

Life's milestones are worth celebrating. Just remember that once the bubbly is gone and the cake is eaten, a little financial planning can help you focus on what matters and make the most of what comes next.

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Leaving an equal inheritance sounds fair and like the right thing to do. Just split everything down the middle, avoid playing favorites, and do what you have to do to keep the peace. Easy.

But "equal" doesn't necessarily mean "fair," and even your best intentions can lead to the opposite result: Resentment, tax surprises and shattered relationships after you're gone.

The decision becomes even more important when you consider that over the next two decades, Americans will pass down over $100 trillion in the so-called Great Wealth Transfer.

But when it comes to inheritance plans, a new Kiplinger-Morning Consult survey reveals a major gap in expectations and knowledge between older and younger generations in many families. Two in five families have never discussed inheritance plans, and three in 10 parents have no formal plans at all.

Should you leave an equal inheritance to your children? In most cases, the answer is yes, but it can be a double-edged sword, explains Ryan Skinner, president of Apex Retirement Services.

Should fairness be your first concern?

Skinner says the best starting point is to plan to divide the inheritance equally while keeping your options open. "Successful children should not be punished for succeeding, and children who have made poor decisions should not automatically be rewarded for failing."

Phil Reed, estate and asset protection attorney at Reed Law, agrees. "Inevitably, fairness is always the first concern. But fairness and equality are not the same thing, and having simplified math isn't always the best choice when determining the percentage of a distribution."

For instance, "When a child has served as a caregiver for the parent, the parents may want to compensate that child for the years that they were involved with their care and support. Alternatively, a child actively involved in the family business may be entitled to a higher percentage of the estate when other siblings were not involved."

When you have children with different needs and different involvements with the family, equal distribution tends to be inequitable, at least in the minds of the heirs, he says.

"The primary thing to keep in mind when deciding how to divide your estate is communicating the reasons for that decision and having those memorialized in your estate plan specifically."

All is fair in love

The Morning Consult-Kiplinger survey finds most adult children (70%) and parents (67%) feel ready to manage an inheritance. However, readiness isn't always the same as fairness.

For instance, it's common to give one child a down payment on a house or pay their college tuition. Maybe you covered a financial emergency for another child. Unfortunately, the child who received less during your lifetime might feel resentful, while the one who already benefited might not remember your help.

Without a change to your estate plan (sometimes called a hotchpot clause), the equal division can highlight any uneven splits.

Testate and intestacy statutes

Under United States law, a person who creates a valid will can divide their money and property in almost any way they choose. When someone dies without a will, state law distributes their estate based on family ties instead of splitting it equally.

When a will exists, the estate is testate, and the will controls how your property is divided. If you have no will, the estate is intestate, and the state's intestacy statute provides a formula that rarely leaves your kids with the same amount. The idea that siblings automatically get "equal" slices of the same pie is a myth that can cause lawsuits, hurt feelings and tax surprises.

Assets that can't be easily split

Leaving your family home "equally" to your children can lead to months or even years of unwanted maintenance, unpaid taxes and arguments, especially when they can't agree on selling, renting or keeping it.

One sibling often ends up doing all the work while the other siblings wait for the cash to roll in. "Thankfully," says Evan Mills, financial adviser at Scholar Advising, "there are different ways to set up entities so the kids no longer have to worry about who's going to pay for the new roof or the property taxes."

But if that structure isn't available for some families, he goes on to say, a house can become the main area of disagreement within the family, and that's not what you want, especially at what's already going to be an emotional time.

Likewise, a family business split equally among siblings who never worked there can complicate decision-making or force a sale, essentially eliminating the livelihood of the child who runs it.

Reed contends that life insurance proceeds and retirement accounts also look equal on paper but produce different tax results depending on the sibling's tax bracket and says that communication is the single most effective safeguard against discrepancies.

"Explain your reasoning while you're still alive. A letter of intent that accompanies your estate plan documents can reduce the 'Mom loved you more' narrative." Professional trustees, no-contest clauses and updated beneficiary designations on nonprobate assets further reduce the chance that the plan unravels in court," he says.

Sacrifices might go unrewarded

It's not uncommon for one child who becomes the default caregiver — living nearby for years, driving to appointments and managing medications — to feel they deserve a greater inheritance when compared with the sibling who only visited twice a year. This scenario can easily lead to bitterness and resentment.

In the same way, handing your big spender the same lump sum as your penny pincher can often hurt more than help.

Trusts with spendthrift provisions mainly exist because equal gifts can backfire.

Beyond the financial side, the emotional impact is also rarely clear-cut because inheritances are typically viewed as a substitute for parental love. Even wealthy children can experience an equal-but-unexplained estate plan as a form of rejection if their needs or circumstances differ.

When estate lawyer Marvin Blum asked Warren Buffett and the late Charlie Munger about inheritances at the 2022 Berkshire Hathaway annual meeting, Munger replied, "If you're going to treat them unequally, that is poison."

But a "split it equally" plan can cause many of the same problems: lawsuits, claims that Mom and Dad loved you more, or worse yet, siblings who argue and never speak again. Many estate lawyers say that when decisions are left unexplained, families fight, even if the split looks even on paper.

That said, more kids favor "fair" over equal than parents do, by a 21-percentage-point margin, according to the same Kiplinger-Morning Consult survey.

A better approach exists

Brian Gately, managing partner at Anchyra Partners, argues that a better approach exists.

"While the instinct to divide an estate into precise, equal percentages is understandable, rigid equality often fails to account for the unique realities of your children's lives, capabilities and callings."

He says that rather than viewing unequal divisions as favoritism, families should view estate planning as a customized toolkit designed to give each child the specific support they need to thrive.

"By using modern trust structures, you can ensure that your less financially inclined children are protected and your public-service-minded children are supported, all while preserving long-term family harmony."

Closing the inheritance expectation gap

The Kiplinger-Morning Consult survey revealed a stark disconnect: Parents are twice as likely to plan on leaving a meaningful inheritance as adult children are to expect one. Bridging that gap requires open communication and a big-picture view.

You'll need to weigh past financial support, individual sibling needs and the mix of liquid and illiquid assets. Rather than defaulting to an equal split, work with an estate-planning attorney to tailor a strategy that makes practical sense.

Ultimately, an inheritance isn't about picking a favorite child. It's about leaving a legacy that unites your family instead of dividing it.

More Trillion Dollar Talk

• The Trillion Dollar Talk
• We Asked 5,000 Americans About Inheritance. Here's What We Learned.
• What Happens When You Inherit a House — With Your Siblings

The Great Wealth Transfer is underway in the United States, with an estimated $124 trillion in assets expected to pass from older generations to younger ones over the next 20 years or so.

This massive wealth transfer has major implications for families. And according to a Morning Consult survey commissioned by Kiplinger, most heirs feel ready to manage the money they will receive.

Top of mind, according to those surveyed by Morning Consult, is providing for their family, while paying off a mortgage and improving a home come in second. Not far behind is investing their new windfall to grow their own wealth. But with a seemingly endless amount of assets available to invest in, how do you choose the right one for you?

Here, we attempt to narrow the field with our short quiz on how to invest your inheritance, or whether you even should. While this is no substitute for meeting with a financial adviser, which is the best way to figure out what is right for you, it's a good way to test your knowledge.

And don't worry if you miss a question or two. The articles we link to below give deeper insight into investing and portfolio management.

More on investing and inheritance from the Kiplinger team

• The Trillion Dollar Talk
• I'm 45 and I’ve Barely Invested in the Stock Market. I Recently Inherited $50,000. What Should I Do?
• 5 Core Stocks Every Investor Should Own in 2026 and Beyond
• The Asset Location Rule for Income Investments in Retirement
• Why ETFs Are One of the Easiest Ways to Start Investing
• 5 Best Index Funds for Long-Term Growth
• Which Capital Gains Are Taxable and How to Calculate Your Tax
• How Your Inheritance Actually Gets Taxed: From Stepped-Up Basis to IRA Rules
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Right now, I'm watching three of my closest friends' families fall apart in slow motion.

The circumstances are different, but the arguments sound remarkably similar:

"Mom already gave him money for years."

"Dad told me something completely different."

"Why did she get more?"

"Who gets the house?"

"Was Dad even capable of making that decision?"

What I'm watching isn't unusual. Inheritance can bring out feelings that have been sitting there for years. In a 2025 Trust and Will survey, 38% of Americans who had shared their estate plans with family said those conversations led to disagreements.

Caregiving responsibilities among adult children aren't always shared equally, which further complicates inheritance decisions. One child lives 10 minutes away. The others live three states away. At first, she's helping Mom out. Then she's sitting through medical appointments, figuring out what the doctor said and what needs to happen next, managing medications and emergencies, handling bills and perhaps cutting back at work.

Business Insider (paywall) reports that daughters make up roughly 61% of family caregivers overall, and nearly 70% of those provide round-the-clock care. The financial toll even has a name: The "daughter tax."

It can mean reduced work hours, missed promotions, paused retirement contributions and more than $7,000 a year, on average, in out-of-pocket caregiving expenses, according to AARP. Over time, the hit from lost wages and retirement savings can approach $295,000.

Then Mom dies and the will says everything gets split equally.

The daughter is thinking, "I gave up years of my life and spent my own money taking care of Mom." Her siblings are thinking, "Mom said we split everything equally."

Was she supposed to be reimbursed? Compensated? Did Mom intend to leave her more?

Parents: Your money should take care of you

Before you start mentally dividing your assets among your kids, ask yourself: What if I need that money?

According to Kiplinger's Trillion Dollar Talk survey, conducted in partnership with Morning Consult, roughly two in five families have never discussed inheritance plans.

Of course, parents aren't obligated to tell their adult children how much they have or what they're going to inherit. But there's another conversation I think you really should have: What money will be used to fund my long-term care should it be needed?

What if you or your spouse require years of in-home care, assisted living or memory care? What if you need to retrofit the house so you can stay there? Which assets will pay for it, and who manages the money if you can't?

The inheritance your kids may have in their heads today could look very different after five or 10 years of care. And if you never talk about that possibility, you're setting everyone up for assumptions, surprises and, yes, conflicts.

My friend Beth Pinsker, CFP and MarketWatch columnist, wrote My Mother's Money: A Guide to Financial Caregiving after managing her own mother's finances and care. At one point, her mother's caregiving costs reached about $12,000 a month.

There may be much less inheritance after you pay for your own care. There may be none. That's ok. The inheritance is what remains after you take care of yourselves.

That's what I'd talk about with the kids: Here's how we intend to pay for our care. Here's who will handle the finances if we can't. Here's what we may need from you — and what we don't. That way, if the inheritance changes dramatically, nobody is left wondering what happened to Mom and Dad's money.

Equal isn't always fair

Parents often assume an equal split is safest. Two children? Fifty-fifty. Three? One third each.

But maybe you gave one child $100,000 toward a house. Was that simply a gift or an advance on an inheritance? Maybe another child has significant health or financial needs. Maybe one wants the family house while the others want cash.

If you decide on an unequal split, understand how it might be heard. "Sarah needs more help" can easily become, "Mom cares about Sarah more."

You don't need to disclose your net worth or give everyone a preview of the will. But if you're making a decision that could surprise one of your kids, tell them why.

Here are the steps I advise anyone in this situation to take:

1. Head off the big fight now

Keep your will, trust and beneficiary designations current. Be clear whether a substantial lifetime gift is simply a gift or something you expect to count against an inheritance.

If one child is spending significant money on your care, decide whether those expenses will be reimbursed.

Think carefully about whom you name as executor or trustee, especially if that person is also an heir. And ask who actually wants the house, jewelry, furniture or Dad's watch.

Don't assume you know. The point isn't to make everyone happy with every decision. It's to make your intentions clear while you can.

2. Bring in a neutral voice

This is also where a good fee-only financial adviser can do much more than manage investments. There are several qualified advisers in my Wealthramp network who are helping families navigate this situation.

The right adviser can model what several years of care could do to your finances, put numbers around different inheritance choices, look at whether one child can realistically afford to keep the family house, and help you think through these decisions without being emotionally involved in them.

Your adviser isn't your estate attorney. The adviser helps you work through the financial choices; the attorney makes sure those choices are properly documented. Ideally, they work together.

3. While you still can, talk about it

I keep coming back to my three friends. In these families, only one parent is still alive, and even then, it's too late for the conversation I'm talking about. The decisions have been made, and the lines have been drawn.

So to my friends who are parents with adult kids: Have these conversations now. Don't leave your kids to guess what you meant later.

And to my friends who are already in the middle of this, I hope you can find your way through it without losing each other in the process.

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

When you think about the inheritance you'll pass to your heirs, you're likely thinking about your home, your savings and maybe a few treasured family heirlooms. You're probably not thinking about things such as your home insurance or car insurance.

But when it comes time to settle your estate, your insurance policies are just as important as everything else.

There are four common insurance-related problems executors face, said Evan Farr, certified elder law attorney and retirement planner practicing in Virginia, Maryland, and Washington, D.C.

"These include failing to recognize that a policy existed; out-of-date beneficiary designations; lapse of coverage because premiums were not paid on time; and ambiguity surrounding whose responsibility it is to collect proceeds (the estate or designated beneficiary)," Farr said.

To help prevent these problems, your executor needs to know about all of the insurance policies you have, even those you might not think are relevant.

How overlooked insurance policies cause headaches for your executor

Some of the most obvious issues that can come up involve life insurance. Nearly half of parents said life insurance is a key piece of the estate their children will inherit, according to a survey of more than 5,000 Americans Kiplinger conducted in partnership with Morning Consult.

But if your heirs don't know that life insurance policy exists, they might not know to file a claim. If the life insurance beneficiary you designated years or even decades ago is still listed on the policy, the benefits might not go where you now want them to go.

Since a life insurance payout can represent a significant part of the financial legacy you leave behind, it's essential that you make your policy easy to find and make sure your beneficiaries know it exists. Otherwise, a payout could be delayed while your loved ones try to locate the policy or determine who is entitled to the proceeds.

That communication could be especially important. A Morning Consult survey commissioned by Kiplinger as part of our Trillion Dollar Talk campaign found that among adult children who knew their parents had a will, estate-planning documents or a designated beneficiary, 35% didn't know how to access them. Making sure your executor and beneficiaries know where to find important insurance information can help close that gap.

Executors can also run into problems with home or car insurance. While an estate is being settled, the executor generally needs to make sure its assets remain appropriately insured. That can mean contacting insurers and determining what coverage needs to remain in place.

For example, if a fire, theft or other covered loss occurs while a home is part of an unsettled estate, problems could arise if coverage has lapsed or the insurer hasn't been notified of changes affecting the policy.

Your death can also change how an insurer handles an existing policy and who has authority to make changes or file a claim. Rather than assuming existing coverage will continue unchanged, your executor should contact the insurer to report the death and find out what documentation or changes are required.

With home insurance, in particular, your executor might also need to notify the insurer if the home becomes vacant or unoccupied for an extended period. Vacancy can affect coverage because an empty home can present different risks, including vandalism, theft and damage that goes unnoticed. Depending on the insurer and policy, different coverage or an endorsement might be necessary.

Similar issues can arise with any cars that are part of the estate. Your executor should contact the auto insurer before someone begins regularly driving an inherited vehicle or before coverage is canceled or changed.

Who is covered to drive the vehicle and how long existing coverage continues after the policyholder's death can depend on the policy and insurer. Giving your executor the information they need to contact the insurer and handle coverage appropriately can help protect both the vehicle and the estate.

How to make sure your executor can find your insurance policies

Whether you keep paper copies of all your policies or you've gone digital, the easiest way to keep track of your insurance is to create a single sheet listing every insurance policy you own.

"A consolidated inventory of all of your insurance policies is perhaps the single most valuable thing you can leave for your executor," Farr said. That inventory should include the following details for each policy:

• Name of the insurance company
• Policy number
• Your agent or broker's name and contact information if you have one
• What the policy insures. This can be a broad label such as home insurance, car insurance or term life insurance. You should also mention any riders or supplemental coverage here, too.
• Your current premium amount and how frequently you pay it (i.e., monthly, quarterly, annually).
• Where to find copies of the actual insurance policies. If you have them downloaded as PDFs, you can link to those files in the spreadsheet where you're keeping this inventory. If you access them via an online portal, note where your executor can find those login details. If you keep paper copies, note where that paperwork is stored.

You can keep all this information in a spreadsheet on your computer. Farr recommends updating it annually, as details such as premiums and coverage types change. If you switch your home or car insurance for a better deal; however, make sure to update the inventory right after you make the switch.

Writing out this inventory isn't enough on its own. The next step is to make sure your executor knows it exists and how to find it.

"Ideally this document would be made available to your executor via a secure digital storage system (like a password-protected cloud-based file share or an encrypted digital safe)," said Farr.

The key is to make sure you store your financial documents, including insurance policies, in a way that's accessible enough to the person who needs the document, but secure enough that no unauthorized person can get your detailed policy information.

Related content

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It's been said, "You can't take it with you." Egypt's pharaohs might have agreed to disagree, but the baby boomer generation seems to understand this fact of life.

Financial experts have long expected that over the next two decades, baby boomers (and members of other older generations) will pass along more than 100 trillion to spouses, children and other heirs — a phenomenon dubbed the "Great Wealth Transfer."

We'll see what happens when those assets start landing in new accounts, but according to a Citizens Bank survey of 1,500 U.S. adults, the majority (60%) said they'd invest at least part of it.

In a new survey by Morning Consult, commissioned by Kiplinger for our Trillion Dollar Talk campaign, 15% of adult children said they'd use an inheritance to "invest and grow wealth," the third most popular response after providing for the family and investing in a home.

Why not? Many Americans are behind on their own retirement savings, and even those who are on track wouldn't complain about a cushier post-career lifestyle. Some in that number might already be thinking several decades down the road when it's time to repay the gesture by passing along wealth to their own spouses and children.

As one survey respondent told Morning Consult/Kiplinger, they'd put an inheritance from their parents "into investments," since "that's what pretty much helped them earn it in the first place."

Today, we'll look at five stocks for the task — each of which already boasts a place among the greatest wealth-generating equities of the past century. Data is as of August 28.

Most stock-market wealth creation has come from a few dozen companies

If you're looking to grow your wealth, there are few better places to start than with a 2026 study from Hendrik Bessembinder, a finance professor at Arizona State University's W.P. Carey School of Business, who researched the investment outcomes from nearly 30,000 stocks over the 100 years from 1926 to 2025. In the report, he outlines the greatest wealth creators over that period.

What constitutes shareholder wealth creation (SWC)?

"The improvement (or decline) in the wealth of a company's shareholders in aggregate over the period that the company's shares were listed on the public stock markets, as compared to the outcome that would have been attained had the invested capital instead earned one-month Treasury bill returns. SWC considers net distributions (dividends, spinoffs, share repurchases, new share issuances, etc.)."

Our own Dan Burrows explains that "T-bills are a kind of stand-in for opportunity cost. And the difference [in performance] over time between the two investment choices, when positive, is wealth creation. It's the enhancement."

Bessembinder found that wealth creation within the stock market was highly concentrated among a handful of names. "Just 46 firms account for half of the $91 trillion in net wealth creation over the full century," he says.

That's where we'll start our search for stocks that you can use to build your own wealth, to the point at which you have something substantial to leave behind for your kids.

Each company mentioned here is among those 46 firms Bessembinder identifies and has certain characteristics and advantages that point toward their ability to continue generating returns well in excess of that T-bill benchmark.

Note: Lifetime wealth creation is measured starting at the initial stock-market listing or January 1926, whichever is more recent, through December 31, 2025.

Merck & Co.

• Sector: Healthcare
• Market value: $366.2 billion
• Lifetime wealth creation: $519.1 billion
• Percent of market total: 0.57%

Merck & Co. (MRK) is a healthcare-sector giant whose roots go all the way to 1668 with the founding of Germany's Merck Group, which created the American affiliate we know in 1891.

The company is responsible for blockbuster treatments and vaccines such as Gardasil (HPV), Januvia (type 2 diabetes), Zocor (high cholesterol) and most notably Keytruda (cancer fighter), which has generated nearly $180 billion in global sales since its debut in 2014. It also has developed a large animal healthcare business.

The formula for continued wealth creation in just about any pharmaceutical or biotechnology name is pretty straightforward: They need to discover and/or purchase successful treatments that are lucrative enough to offset any declines in their established drugs. But that's a particularly tall task for MRK given that Keytruda, which makes up roughly half of the company's revenue, will see its core patent expire in 2028.

How will Merck counter this? For one, it has compiled a promising developmental pipeline of treatments, including infinatamab deruxtecan (extensive-stage small-cell lung cancer), opevesostat (metastatic castration-resistant prostate cancer) and tulisokibart (ulcerative colitis and Crohn's disease).

But perhaps more important, it has built a "patent wall" of more than 1,200 patents across 53 countries, regions and territories, according to a report from The Bureau of Investigative Journalism:

"This investigation found 211 granted patents that help protect Keytruda through to at least 2042 — a full 14 years after the originals expire. There are also at least another 337 'pending' patents that, if granted, could also extend the drug's reign. The vast majority of the applications came after the drug's initial approval in 2014."

Now, Merck appears on the precipice of a breakthrough. In August, Merck and Moderna (MRNA) announced that their jointly developed experimental mRNA cancer vaccine met the primary goal of a Phase 3 clinical trial.

This large trial of more than 1,000 melanoma patients showed that a combination of the intismeran vaccine and Keytruda was more effective in preventing the return and spread of melanoma and resulted in fewer side effects than the use of Keytruda alone. It's another boon for Keytruda, as doctors sometimes will not recommend it because of the risk of side effects.

In addition to all the above, Merck pays a dividend that has grown for 16 consecutive years and currently yields an above-average 2.3%. It also throws billions of dollars at stock buybacks in most years.

Walmart

• Sector: Consumer staples
• Market value: $820.8 billion
• Lifetime wealth creation: $1.2 trillion
• Percent of market total: 1.32%

Why would we look to Walmart (WMT) to be a top-tier wealth creator given that it's a big-box retailer during the era of e-commerce?

For one, the death of brick-and-mortar retail has been heavily exaggerated. While e-commerce has been growing both nominally and as a percentage share of U.S. retail sales since its creation, brick-and-mortar still accounts for the vast majority (77%) of dollars spent. After a big leap in online buying adoption during COVID, e-commerce's penetration growth has moderated.

Walmart is also the second-largest online retailer in America. It's a distant second to Amazon (AMZN), but e-commerce accounts for roughly a quarter of Walmart's total U.S. sales, which still dwarf Amazon's domestic retail revenues.

Believe it or not, the sizable majority (62%) of its wealth creation since joining the public markets in 1972 has come since 2016.

Walmart is a retailer, so its ability to continue being a significant creator of wealth going forward largely rests on the power of the American consumer. Walmart is technically considered a consumer staples company given that it deals in groceries and personal products that have a certain level of backstop, but much of what it sells is discretionary in nature.

As for other shareholder rewards? WMT has a modest payout that's just below the S&P 500's yield, but it's a Dividend King that has grown its cash distribution for 53 consecutive years — and if that continues, shareholders should keep enjoying higher and rising yields on cost.

Walmart also repurchases gobs of its own stock, spending from $2 billion to nearly $10 billion on buybacks every year for the past decade.

Amazon.com

• Sector: Consumer discretionary
• Market value: $2.87 trillion
• Lifetime wealth creation: $2.3 trillion
• Percent of market total: 2.49%

We'll also look to No. 2 retailer (and No. 1 online retailer) Amazon.com (AMZN), which, at $2.3 trillion, is also the No. 5 wealth creator of the past 100 years.

But its future growth will depend on much more than its retail business.

Amazon also offers streaming services in the form of Amazon Prime Video and Amazon Music. It's an AI hyperscaler. It has an ad network. It provides supply chain services. It delivers digital and physical care options through One Medical and Amazon Pharmacy. It offers grocery delivery and has a private-label food brand.

As we point out in our argument for Amazon as a core stock holding, its Amazon Web Services (AWS) cloud provider arm is "the straw that stirs the drink." Amazon believes AWS alone could become a $1 trillion-a-year business.

The argument for AMZN to continue creating wealth in the long term is not just these divisions, but Amazon's ability and willingness to either build out or acquire its way to new lines of business (or drastically expand its existing businesses). In the past few years, for instance, Amazon has purchased autonomous driving technology firm Zoox, entertainment company MGM Studios, the aforementioned One Medical and satellite telecommunications firm Globalstar.

Despite its frequent spending, AMZN still sits on $122 billion in cash and short-term investments and a similar sum of long-term investments. It doesn't pay a dividend, and it infrequently repurchases stock. But as long as Amazon has no compunction about plowing money into growth, it could continue to expand the wealth you hope to eventually leave to your heirs.

Nvidia

• Sector: Technology
• Market value: $5.25 trillion
• Lifetime wealth creation: $4.6 trillion
• Percent of market total: 5.03%

Nvidia (NVDA) is the No. 2 wealth creator of the past 100 years, producing $4.6 trillion in excess of a Treasury-bill benchmark since the chipmaker went public in 1999.

Just about everyone reading this knows why this tech stock has done so well in recent years: its role in the expansion of artificial intelligence.

"We believe the NVDA shares have much further to go and believe that most technology investors should own NVDA in the age of AI and GPU-driven applications acceleration," says Argus Research analyst Jim Kelleher, who rates shares at Buy. "We recommend establishing or adding to positions in this preeminent vehicle for participation in the AI economy."

The unfettered growth of artificial intelligence isn't a slam dunk by any means. Public opinion has turned sharply negative on both AI and especially the data centers popping up to propel the technology. Among AI-related stocks, few are more tightly tethered to the technology than Nvidia.

But the reason to be optimistic about Nvidia is everything else the chipmaker is involved in: gaming; graphics; traditional data centers; cloud computing; autonomous vehicles; climate forecasting; genomic sequencing; and much, much more. As long as people need technology broadly, what Nvidia produces seems likely to be in demand.

Nvidia also has nearly $100 billion in cash and investments that it could put to work if needed, and it churns out tens of billions of dollars in free cash flow every year.

NVDA has stepped up stock repurchases drastically in the past couple of years, accelerating from nearly $2 billion in 2021 to $12 billion in 2023 and $48 billion in 2025. While its 25-cent-per-share dividend comes out to just half a percent in yield, that dividend is 25 times what it was a year ago, and Nvidia has a world of room to expand it further.

Apple

• Sector: Technology
• Market value: $4.5 trillion
• Lifetime wealth creation: $5.0 trillion
• Percent of market total: 5.52%

Last on our list but first among wealth creators of the past 100 years, Apple (AAPL) appears likely to continue delivering far better returns than we could get from T-bills.

Apple has been one of the greatest growth stocks of the past few decades because of its ability to create category-defining devices such as the iPod, iPad and iPhone.

But the reason we can likely count on Apple to continue doing so is that the company has historically never been a first mover. Instead, it takes emerging technologies and perfects them.

The Macintosh wasn't the first personal computer, but it popularized personal computing thanks to its all-in-one design, graphical interface and mouse. The iPod wasn't the first MP3 player, but its massive storage and simple user interface made it a hit. The iPhone came after the likes of the BlackBerry and Palm Treo, but it became a dominant smartphone, thanks to its touchscreen, web browsing and App Store.

Incredibly, the vast majority of Apple's wealth was created after the 2011 death of Steve Jobs. His replacement, Tim Cook, was less a product innovator and more of an operations and supply chain specialist who also understood the potential of services. Cook himself stepped down in September 2026, and was replaced by John Ternus, who helped oversee the development of the iPad, AirPods and Apple Watch, among other projects — but Cook will retain an important role with the company.

"Mr. Ternus, a 25-year Apple executive that joined Apple three years after Mr. Cook, has been an important part of Apple product launches for over two decades, and promoting him to CEO clearly shows Apple's emphasis on product at the center of the flywheel will remain," says Morgan Stanley analyst Erik Woodring (Overweight, equivalent of Buy). "Tim Cook remaining Executive Chairman and 'engaging with policymakers around the world' shows Tim will remain a critical conduit between Apple and political leaders around the world, a role Mr. Cook has excelled at."

From a financial standpoint, Apple boasts many of the same advantages as the other wealth-building stocks on this list. It has $62 billion in cash and short-term investments and an additional $84 billion in long-term investments that it can use for transformational acquisitions.

It's also a cash-flow machine that has been repurchasing $80 billion and $100 billion in AAPL shares every year since 2021. The dividend has also grown every year since 2012.

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It's been billed as the greatest financial windfall in history, a tidal wave of wealth washing from the richest generation ever onto their heirs. But the reality is far more complicated.

Aptly named the great wealth transfer, it's the handoff that research firm Cerulli Associates projects will total $124 trillion through 2048, with $105 trillion flowing to heirs and $18 trillion donated to charity. That wealth is flowing from the aging silent generation and baby boomers down to their children and grandchildren.

Once you account for a few other factors, though, "great" may be better described as "just OK." Visa Business and Economic Insights argues the spendable transfer is actually closer to $36 trillion from boomers over 20 years, once you deduct things such as debt, taxes and retirement spending.

Whatever the true figure turns out to be, the $60-trillion-plus gap between the two estimates shows how slippery this forecast really is. And it points to a bigger truth: Not everyone stands to catch the same share of this falling wealth.

Here's a sharper picture of who actually benefits — or doesn't — and how your own situation compares.

To those who already have much, much will be given

If you come from a wealthy family, chances are you'll be among the biggest beneficiaries of the Great Wealth Transfer. Cerulli estimates that households worth $10 million or more — about 2% of all households — account for roughly half the entire transfer.

The averages reflect that skew. While the average U.S. inheritance is about $46,200, according to Federal Reserve data, the median is far lower, because a handful of enormous transfers pull the average up. The bottom half of recipients average around $9,700; the top 1% average about $719,000.

Ultimately, most people get nothing at all, as only about one in three Americans ever receives an inheritance. So, if you're not expecting one, then — congrats, I guess? — you're in the majority.

Millennials stand to get a greater share, but may have to wait

If you came of age watching Dawson's Creek or Buffy the Vampire Slayer, there's a good chance you're set for a larger slice of the transfer.

That's because Cerulli's research projects that millennials will inherit the most of any generation over 25 years — around $46 trillion. But it's those who grew up with MTV, Gen X, that will inherit the most in the next 10 years, with $14 trillion versus millennials' $8 trillion.

Those hoping for a windfall to cover a home down payment or help start a family may have to wait. Federal Reserve analysis finds inheritance receipt peaks around age 60 — a natural result of a typical lifespan near 80 and a roughly 20-year gap between parent and child.

However, the growing recognition that heirs often get the money when they least need it is nudging some families to pass wealth on sooner. More than four-in-five parents (82%) said they have given their adult children financial help since age 18, according to a new survey by Morning Consult commissioned by Kiplinger for our Trillion Dollar Talk campaign.

Popularized by figures like Bill Perkins, author of Die With Zero, the idea is to help while children still need it, rather than when they're nearing retirement themselves.

The transfer won't touch the racial wealth gap

If any single factor sorts the winners from everyone else, it's this one. As with nearly every measure of pay and net worth, there's a stark racial disparity here.

White households are about 2.8 times more likely than Black households to receive any inheritance at all. And when they do, they inherit roughly 5.3 times as much as Black households and 6.4 times as much as Hispanic households, according to Penn Wharton estimates. Around a third of white families ever inherit, versus roughly one in 10 Black families, according to a 2023 study by the Boston Fed.

The gap holds even among those expecting something. An Urban Institute analysis finds the median Black renter who anticipates an inheritance estimates it at about $48,000, compared with $200,000 for the median white renter.

The Federal Reserve Bank of Boston study found that lifetime earnings and pension assets — not bequests — explain most of the racial wealth gap, which is a big reason the coming transfer is unlikely to close it.

Women benefit from the transfer before the transfer

When it comes to which sex comes out ahead, it's women who are positioned to receive more than men. But there's a key caveat.

The first handoff is often horizontal, not generational. Cerulli projects that some $54 trillion will move between spouses before it ever reaches a younger generation, with nearly $40 trillion of that going to widowed women in the boomer and older cohorts, who tend to outlive their husbands.

For many women, then, the wealth transfer is less a true inheritance than a stretch of sole control over a shared nest egg, frequently while absorbing the very late-life costs that shrink what's left to pass on.

Not all the wealth is inheritable, or at least, easily inheritable

An important distinction rarely makes the headlines: Not everything older generations have accumulated can actually be passed down.

A traditional defined-benefit pension typically pays income for life and then stops at death, or continues at a reduced rate to a surviving spouse. It generally leaves no lump sum for the kids. A 401(k) or IRA, by contrast, is an asset heirs can inherit outright.

As a result, two retirees with identical incomes can leave very different estates. The one living comfortably on a generous pension may pass on little, while the one who saved that same income in a 401(k) leaves behind a balance. Through 1980, nearly 40% of Americans had a traditional pension. The long shift toward 401(k)s and IRAs since then has, paradoxically, made retirement wealth more inheritable.

Parents on the older edge of the boomer cohort or in the silent generation more often spent full careers under traditional pensions that leave nothing behind, while those on the younger edge came up saving in 401(k)s. So, whether there's a balance to inherit at all can hinge partly on where your parents fall within their own generation.

A large share of boomer wealth isn't liquid, either. It's home equity. Realtor.com found boomers hold about $19 trillion in real estate, and for many families the house is the single biggest asset. Unlike a brokerage account, which heirs can sell and split in a day, a house is a single, illiquid asset that usually can't be divided without selling it.

Some states will tax you more

Where you and your parents live shapes what heirs keep. Thirty-three states levy no estate or inheritance tax at all. Twelve states plus Washington, D.C., impose an estate tax (paid by the estate), and a handful — Kentucky, Nebraska, New Jersey, Pennsylvania and Maryland, which has both — levy an inheritance tax (paid by the person who receives the money).

The catch is the exemption. The federal estate-tax exemption sits at a lofty $15 million per person in 2026, but several states start far lower — $1 million in Oregon, $2 million in Massachusetts — low enough that an ordinary home plus retirement savings can trigger a bill. It's part of why Florida, Texas and Nevada, which levy neither tax, are such popular landing spots for retirees.

To the original savers may go the spoils

Ultimately, the ones who benefit most from all this wealth just might be the ones who saved and invested it in the first place.

Many boomers intend to spend it themselves. In a Charles Schwab survey of affluent boomers, 45% said they'd rather enjoy their money while they're alive than preserve it as an inheritance.

Longevity is the main driver, with healthcare acting as much the culprit as hedonism. Fidelity estimates the average 65-year-old will spend about $185,000 on healthcare in retirement before long-term care even enters the picture. Money once earmarked for the kids becomes money spent on aging.

And boomers are increasingly aging in place. One survey even found 68% live in homes at least three decades old, many overdue for renovation, and most in no rush to downsize. That points to wealth that's more likely to be used up than passed on — put toward renovations or drained by late-life care.

Whether you're a clear winner or loser or something in between, it might be best to treat any inheritance as a bonus rather than a foundation. And have the awkward family conversation, because nearly 30% of American parents have no formal estate plan, including a will, the Kiplinger/Morning Consult survey found. In the end, the winners won't necessarily be the ones who receive the most. They'll be the ones who planned ahead.

More Trillion Dollar Talk

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