21 Apr Estate Planning Strategies for Large Families

Estate planning can get complicated. Especially when it involves distributing wealth among the members of a large family. For families that have built up substantial assets over multiple generations, maintaining harmony between family members takes some careful handling. 

To shed some light on the steps you need to take, we created an example scenario about estate planning for a large family. We also share some strategies for managing a multi-generational estate, and touch on the importance of trusts, tax exemptions, and professional guidance. 

Estate Planning with a Large Family: An Example Scenario

Three adult siblings are set to inherit an assortment of assets from their parents. It’s part of the generational wealth that’s been built up in the family for several decades. Their parents are no longer able to manage the estate themselves. They now live in an assisted living community, and left minimal directions for their children on how to handle the family finances. The parents have created a basic will, but don’t have any other documents in place.

What they would like is for their oldest daughter, Caroline, to take over the responsibility of estate management. Caroline, while grateful to be considered, is afraid that the job will require a large time commitment. She is also worried that the role might force a wedge between herself and her siblings. Some of them have already made comments about how she’s receiving preferential treatment. They’re afraid that Caroline will use her power to sequester more of the inheritance for herself than she distributes to the rest of them.  

After reading through their will, Caroline finds out she’s officially named as executor of the estate. She considers refusing the job, because she’s worried her relationships with her siblings could be damaged. She also wants to save herself as much heartache, hassle, and time as possible. However, because her parents placed a lot of emphasis on wanting her to administer their estate, she considers the pros and cons. 

Caroline not only has her parents, herself, and her siblings to consider, but also her nieces, nephews, and her own children. The estate plan will affect all of them. Her parents’ wish is that multiple generations will benefit from the legacy they’ve established, and that their assets will be passed on for decades to come. The family’s long-term goal is to maintain and grow those assets. After talking with her siblings, Caroline begins to form a plan.

Multi-Generational Estate Planning

It takes careful consideration and planning to preserve generational wealth. In order to protect the family legacy and make sure the wealth passes on to the generation, Caroline decides to consult an estate planning attorney who can offer professional help. 

Part of her parent’s plan includes gifting each of their three children equal shares in the amount of $12 million each. However, Caroline’s estate planning lawyer advises her that this may not be a good idea. Because the federal estate and lifetime gift tax exemption will change at the end of this year, it’s important for Caroline’s parents to revise their estate plan as soon as possible. 

Current Exemption (2025)

New Exemption (2026)

Highest Gift Tax Possible

$13.99 million

$5 million

40% 

Since the new lifetime exemption is going to be reduced by about half the current amount, it will affect the amount Caroline and her siblings are set to inherit. Her parents’ estate, with a net worth of more than $50 million (including investments, real estate, business stakes, and other assets) will be heavily impacted by estate taxes.  

Caroline suggests to her parents that they set up a trust for each of their children’s families. A long-term trust is one of the best ways to pass wealth down to future generations, because as long as assets remain in the trust they are not subject to estate or gift taxes. 

With the help of an estate planning attorney, Caroline’s parents establish separate trusts for each sibling. They also name an impartial third party (their financial advisor) to act as their successor trustee. This step helps preserve the personal relationships between Caroline and her siblings, because the assets in the trust are controlled by the trustees. After their parents’ death, their successor trustee will distribute or reinvest the assets according to the terms of the trust.

Five Beginner Strategies for Preserving Wealth in a Large Family

1. Establish a Family Trust 

Setting up a trust can protect your assets from estate taxes and keep them out of probate. By doing this, you can ensure that your wealth will be distributed according to your wishes.

2. Set Up LLCs for Asset Protection

Transfer your family-owned properties or businesses into separate LLCs. This will safeguard the bulk of your wealth from lawsuits and creditors.

3. Maximize Gift and Estate Tax Exemptions

Take advantage of the annual gift tax exclusions and lifetime exemptions to transfer wealth tax-free, reducing the size of your taxable estate.

4. Diversify Your Investments

Spread your wealth across a variety of long-term investments to minimize risks and maximize growth potential.

5. Involve the Family

Teach your children and grandchildren about financial responsibility and the value of preserving wealth. Involve them in the estate planning process. Ensure that your legacy is continued into future generations.

Estate Planning Attorney for Families with High Net Worth

At Phelps LaClair, we understand that your family’s wealth is more than just assets. It’s a legacy to be carefully preserved and passed on to the next generation. Our attorneys deal with estates of all sizes, including large families with a high net worth. We offer estate planning, trust management, trust administration, and estate tax planning services. 

Our goal is to help you find the best ways to protect your family, and we provide personalized solutions for every client. Whether you’re navigating the complexities of estate administration, need to minimize the size of your taxable estate, or want to make sure your wealth is passed on to the next generation, we can help. 

Contact us today to schedule an initial consultation with one of our experienced estate planning attorneys. We’re here to help Arizona families like yours build, protect, and preserve their wealth for generations to come.

Images used under creative commons license – commercial use (04.21.2025).
Photo by Roman Holoschchuk on Unsplash.