For families building
something that lasts

Most people assume a will controls where everything goes. In practice, a will only governs assets that pass through probate. Retirement accounts, life insurance, and annuities pass by beneficiary designation. Jointly titled property passes to the surviving owner. Assets held in a trust pass according to the trust's terms. Bank and brokerage accounts with a transfer-on-death registration pass to the named person.

This is why families sometimes discover that an old beneficiary designation, perhaps naming a former spouse or a child who has since passed away, overrides a carefully written will. A regular review of all of these documents together, rather than the will alone, is one of the simplest and most valuable habits in legacy planning.

A revocable living trust is a common tool for holding assets during life and directing them at death. It can allow assets to pass without probate, provide for management if the owner becomes incapacitated, and set terms for how and when heirs receive what is left to them. Whether it is appropriate depends on the family's circumstances and is an attorney's call.

The federal government taxes very large transfers of wealth, either at death or by gift during life. Each person has a lifetime exemption amount, and transfers up to that amount are not subject to federal estate or gift tax. Under current law the exemption is $15 million per person for 2026, adjusted for inflation in later years, and married couples can generally combine their exemptions through a provision called portability. Amounts above the exemption are taxed at a top rate of 40 percent.

Because the exemption is high, most families will not owe federal estate tax. For those who might, planning tends to focus on using lifetime gifts, trusts, and charitable giving to move assets outside the taxable estate over time. Exemption amounts have changed several times over the past two decades, so plans built around a particular number are typically reviewed when the law changes.

Florida has no state estate tax and no inheritance tax. For Florida residents, the federal rules are the only transfer taxes to consider, which is one reason many families relocate here later in life.

Gifts during life are one of the main ways families move wealth to the next generation. The federal annual gift tax exclusion allows a person to give up to a set amount, indexed for inflation each year, to as many individuals as they like without using any lifetime exemption or filing a gift tax return. A married couple can give double that amount to each recipient.

Two kinds of payments do not count as gifts at all, regardless of amount: tuition paid directly to an educational institution, and medical expenses paid directly to the provider. Grandparents who want to help with school or healthcare costs often use these exclusions.

Gifts above the annual exclusion are still permitted; they simply reduce the giver's lifetime exemption and require a gift tax return. Larger gifts are sometimes made to trusts rather than outright, so that the giver can set terms for how the money is used.

When someone inherits an appreciated asset, such as stock or real estate, the asset's cost basis is generally reset to its value on the date of death. This is called a step-up in basis, and it means the built-in capital gain during the original owner's life is not taxed when the heir eventually sells. Assets given during life do not receive this treatment; the recipient takes the giver's original basis.

This difference shapes decisions about which assets to give during life and which to hold until death. Retirement accounts follow different rules again: inherited IRAs and 401(k)s do not receive a basis step-up, and most non-spouse beneficiaries must withdraw the full balance within ten years, paying income tax as they go. The mix of account types a family holds therefore affects how much heirs actually receive after tax, and in what form.

Families have several ways to help with education. A 529 plan is a tax-advantaged account where contributions grow tax-free when used for qualified education expenses, which now include a range of costs from college tuition to apprenticeships and, within limits, K-12 tuition and student loan repayment. The account owner keeps control, can change the beneficiary to another family member, and can make a large front-loaded contribution treated as five years of annual exclusion gifts.

Florida also offers the Florida Prepaid College Plan, which locks in the cost of future tuition and fees at Florida public institutions. Prepaid plans and 529 savings plans can be used together. Direct tuition payments, described above, are a third route that avoids gift tax entirely but offers no investment growth.

Each approach has implications for control, taxes, and financial aid eligibility. Which fits depends on the family's goals, the child's likely path, and how much certainty the family wants about future costs.

For families with philanthropic intentions, giving can be woven into the plan rather than handled separately. A donor-advised fund allows a family to make a charitable contribution, take a deduction in that year, and then recommend grants to charities over time, which can be a useful way to involve children in giving decisions. Qualified charitable distributions allow people over a certain age to give directly from an IRA to charity, satisfying required distributions without the amount counting as income.

Charitable bequests at death are excluded from the taxable estate, and appreciated assets given to charity during life generally avoid capital gains tax while still producing a deduction. An attorney and CPA can help structure giving to reflect both the family's values and its tax situation.

The technical pieces of a legacy plan are, in the end, the easier part. Harder is deciding what to tell the next generation, and when. Heirs who learn about a plan only after a death often inherit confusion along with assets. Families who discuss their intentions, their reasoning, and their expectations in advance tend to find the transition smoother, even when the conversation itself is uncomfortable.

This can be as simple as a family meeting with an advisor present, a written letter of wishes explaining the thinking behind the documents, or a gradual introduction of adult children to the family's advisors. There is no single right approach. The point is that the plan is understood, not merely executed.