A Creative Way to Craft Your Estate Planning Legacy

Takeaways

• Estate planning isn’t just for the ultra-rich; trusts are valuable tools for anyone looking to structure wealth transfer, protect assets, and minimize conflict, regardless of the inheritance size.

• Proactive communication is key. Families should discuss estate plans, asset division, and intentions with heirs to set expectations and prepare them for managing their inheritance.

The superrich call them “trust reveals” — meticulously planned events where the next generation learns who inherits the ski lodge … or the money needed to buy and board horses.

According to a recent article in the Wall Street Journal, these events are becoming more popular as high-net-worth individuals (HNWI) prepare to pass assets to the next generation amid the “Great Wealth Transfer.”

To prepare the children of wealthy parents for the sometimes-thorny issues that can accompany large wealth transfers, advisors and families are holding trust reveals where children learn, as the WSJ puts it, “Surprise! You have a $100 million trust fund.”

Inheritance plans for the average American are unlikely to include such lofty sums and dramatic unveilings. But the ultrawealthy do provide insights about how to use trusts to transfer and protect wealth and how to have money conversations with heirs.

These lessons, like trust themselves, don’t depend on a certain dollar amount to be effective. They’re available to anyone who values a more tailored way to structure the transfer of their wealth and control how assets are used.

Hard Talks About Good Fortunes

The business of trust reveals is booming during the Great Wealth Transfer that is expected to move more than $100 trillion from older generations, particularly baby boomers, to their heirs and charities by 2048. Of that amount, more than $60 trillion will come from high- and ultra-high-net-worth individuals, who make up only 2 percent of all U.S. households.

That leaves about $40 trillion to be divvied up by the remaining 98 percent of households. But among those, inheritances can vary widely. Many inherit nothing, and some receive sums that, while not as vast as those of the richest households, are significant in their own right.

American households inherit $46,200 on average, Federal Reserve data shows. That amount is enough to significantly change financial fortunes, but it’s skewed by top-tier wealth and belies the fact that 70 to 80 percent of households receive no inheritance.

The top 1 percent, with an average inheritance of $719,000, receives more than four times as much as the next wealthiest 9 percent, which has an average inheritance of $174,200. The next 40 percent of households have an average inheritance close to the national average ($45,900), while the bottom 50 percent receives $9,700 on average.

In addition to the large discrepancies in inheritances by household wealth, what stands out about the Federal Reserve data is that nearly all households that do receive an inheritance expect more than what they actually receive.

This could stem from the fact that most older Americans haven’t told their adult children what they’ll inherit — or if they’ll inherit anything at all. Notably, inheritance expectations more closely match reality for the top 1 percent than for the bottom 50 percent. Could this be the “trust reveal” effect in action?

One advisor told the WSJ that he sometimes meets with parents and children four or five times to prepare for reveals. Inheritance can be a sensitive topic for families, but avoiding tough estate planning conversations can create bigger problems later. Less than half of those inheriting money are financially comfortable handling the new wealth, research also shows. And the bigger the inheritance, the greater the chances for financial mismanagement.

The rich are especially sensitive to the possibility that a large inheritance will demotivate their children. More money, more (potential) money problems, in other words.

But the rich get rich, and stay rich, in part because of better planning and communications about their wealth. They often have a long-term perspective on money that focuses on preserving growth over decades, often guided by wealth management professionals. Studies consistently show that wealthy families are more likely to have an estate plan in place compared to those with fewer assets. The higher their net worth, the more likely they are to have an established will or trust.

Wealthy families are also more likely to have formal and detailed discussions about estate planning with their heirs than less wealthy families, and to use professional advisors. This includes the use of “family meetings,” (e.g., trust reveals) as a strategy to discuss plans, align expectations, and involve heirs with financial advisors, investment professionals, and estate planners early on.

Lessons From Trust Reveals Everyone Can Use

The middle class often tries to emulate the wealthy through lifestyle choices like housing, cars, and consumption. However, the way to accumulate — and keep — real wealth involves playing a different game altogether, one that considers long-term goals and prioritizes generational wealth.

You don’t need to host a trust reveal with your heirs to let them know what they’ll be inheriting from you. But you should have proactive conversations with them about their inheritances.

Advisors, who can help to facilitate these talks, recommend you at least tell your kids how your assets will be divided and the basic structure of your estate plan. That can be harder when there are concerns about an inheritance enabling an adult child or in cases of uneven inheritances.

You don’t have to share exact numbers, but giving them some idea of what’s coming their way and explaining intentions can help to set expectations, prepare for tax planning, and reduce conflicts that can be heightened by a parent’s passing.

Here are other lessons from trust reveals that all Americans can take advantage of.

Trusts Are for Everyone

The idea that estate planning is exclusively for the wealthy is a widespread misconception. Estate planning is crucial for everyone, regardless of their financial status.

Some trusts, including the dynasty trusts mentioned in the WSJ article and certain tax haven trusts, are more closely associated with the wealthy. So are terms like “trust funds” and “trust fund babies” (and even quasi-derogatories like “trustafarian”) that suggest trust beneficiaries never have to work.

The rich overwhelmingly rely on trusts, which have benefits like tax minimization, asset protection, privacy, and control, to pass down their wealth. But that doesn’t mean only the rich should rely on them.

Trusts Are Flexible

Trusts can hold much more than money. The WSJ article mentions stocks, bonds, vacation homes, family heirlooms, business interests, and illiquid assets (e.g., collectibles, fine art, and land). But they can hold almost any type of asset, including things like intellectual property, cryptocurrencies, personal possessions, and even loans and promissory notes.

One family in the article put hotels they own in a trust, alongside personal homes, gold jewelry and watches, and luxury handbags. Another family used a trust to pay for a child’s equestrian hobby, including insurance and medical care for the horses.

The article also notes that “income from trusts themselves can help pay for homes to keep them in the family for generations.” That home may not be a ski chalet in the French Alps, but even if it’s a humbler stateside vacation home or a family home, trusts can provide the money needed for upkeep and set usage terms among multiple heirs, easing the burden on children and helping to honor parents’ wishes.

Short of owning a French ski lodge, you could even leave a gift in your trust to pay for a ski vacation, a trip around the world, or anything else. Match gifting creativity with a trust’s flexibility to create lifetime memories — even after you’re gone.

Trusts Allow for “Control Beyond the Grave”

Estate planning is, to some extent, an exercise in relinquishing control. For parents, your assets will be in your kids’ hands — maybe not now, and maybe not for many years to come, but at some point. Trusts, based on how they’re set up, can ensure that parents retain some degree of control “beyond the grave.”

Warren Buffet cautioned that “Hugely wealthy parents should leave their children enough so they can do anything but not enough that they can do nothing.” Your kids’ inheritance might not be enough that they won’t ever have to worry about money. But you might worry about how they’ll spend your money.

Trusts can address these concerns with incentive structures. Several of these are discussed in the WSJ article, such as matching the income of heirs to keep them working or only allowing heirs to use the money if they earn a four-year degree. Trusts can also require beneficiaries to remain sober or employed to benefit and include highly specific requirements like drug testing or maintaining a certain grade-point average.

Supplementing a structured trust with a “letter of wishes,” although not a substitute for sensitive estate planning discussions during life, can provide further instructions for how you hope your money will be used.

Tap the Power of Trusts With Your Advisor

A wealthy business owner quoted in the WSJ article calls an estate plan “The biggest gift you can give to the people you love.”

Trusts and estates generated around $300 billion for beneficiaries in 2025. Your piece of that pie may be relatively small, but for families across the wealth spectrum, trusts offer a more structured way to pass down money, rather than leaving it in a lump sum through a will.