Family Wealth Advising
Family wealth advising is about supporting and providing for your family during your lifetime: gifting, education funding, lifetime trusts, supporting aging parents, and preparing the next generation to handle wealth. Our advisers help families evaluate the potential impact of these decisions and how they align with their long-term goals.
Supporting Your Family During Your Lifetime
Many families find themselves supporting more than one generation at the same time, helping children or grandchildren get started while also looking after parents who are getting older. Each of these choices is an act of care, and each one has a financial side, from how a gift is funded to how it affects your own retirement. Family wealth advising, sometimes called multi-generational wealth planning, is the work of making these decisions deliberately rather than one at a time as they come up.
Our advisers work with individuals and families on these decisions, helping you understand the impact of each one and what you may be able to do without compromising your own goals. Family wealth advising is the living side of providing for your family, working alongside estate planning, which directs how wealth transfers at death. Many of our clients lead nonprofits and associations or give significantly to causes they care about, and their family decisions often reflect the same values.
Common Considerations Related to Multi-Generational Wealth Planning
Multi-generational wealth planning involves different considerations from one family to the next based on circumstances, goals, and who is involved. A few common considerations* our advisers work through with individuals and families include:
Lifetime Gifting Strategy
Education Funding
Lifetime Trusts
Financial Coordination with Aging Parents
Major Life Transitions
Family Conversations About Wealth
Our Approach to Family Wealth Advising
A gift, a tuition payment, or a trust set up for a child each comes with its own rules, tax treatment, and timing, and each one affects your retirement, your taxes, and your estate plan. The sections below describe how our advisers assist you in understanding those connections and the impact on your ability to achieve your long-term goals.
Understanding Your Goals and Family Picture
How do you want your wealth to support those you care about? Your early conversations with your adviser cover who you want to support and how, your family members’ circumstances, any decisions already in motion, and your own retirement and income needs. This gives your adviser a comprehensive understanding of both your intentions and your financial position before any gift, transfer, or trust decision is made. With a complete view of your finances and your multi-generational wealth goals, your adviser can help you weigh the impact of each decision on your long-term plan.
Evaluating Each Decision Against Your Long-Term Goals
Before deciding how to give to loved ones, it helps to know how much you may be able to give without affecting your own retirement and goals. Your adviser can help you evaluate the potential impact of gifts, education funding, and ongoing support on your retirement income, spending, and long-term goals, and can revisit the conversation as your circumstances change.
Structuring Each Gift, Transfer, or Trust
There are various ways to offer financial support to your family, each with its own tradeoffs. The same gift can be made outright, through a 529 plan, as a direct payment of tuition or medical expenses, or through a trust set up during your lifetime, and the right choice depends on your purpose, the tax treatment, and how much control you want over how and when the funds are used. A lifetime trust, for example, lets you direct how and when funds reach a child or grandchild while you are still living. Your adviser can help you evaluate the options and bring in your CPA when the tax details call for it.
Coordinating with Your CPA, Estate Attorney, and Family
A single gift or trust can touch your tax return, your estate documents, and more than one generation at once. Your adviser is able to share the investment-side analysis with your CPA and estate planning attorney, flags where a decision needs their input, and brings family members into the conversation when one of them is affected.
Reviewing Decisions and Supporting the Next Generation Over Time
Your family and your finances change over time. As children grow up, parents need more help, or your priorities shift, your adviser revisits earlier decisions and adjusts the approach. Your adviser can also help prepare the next generation to handle wealth through financial education and family conversations, so they are ready before wealth changes hands.
Knowledge is Meant to be Shared
Raffa Insights & Resources
Sample Investment Policy Statement
Download our Sample Investment Policy Statement to use as a reference point when evaluating your own policy or starting the conversation with your board.
What's Normal For Nonprofit Reserves?
Learn how to think about reserve structure, investment allocation, and what peer benchmarking data can tell you about where your organization stands.
Frequently Asked Questions About Family Wealth Advising
What is family wealth advising or multi-generational wealth planning?
Family wealth advising, also called multi-generational wealth planning, is the ongoing financial work of supporting your family during your lifetime. For individuals and families, it includes lifetime gifting, education funding, setting up trusts that operate while you are living, supporting aging parents, and preparing the next generation to handle wealth.
How is family wealth advising different from estate planning?
Estate planning is the legal work of directing how your wealth transfers when you are no longer there and is anchored in documents drafted by an estate planning attorney. Family wealth advising is the ongoing financial work of supporting your family during your lifetime through gifts, education funding, lifetime trusts, support for aging parents, and the conversations a family has about money. For individuals and families, the two work together: estate planning provides the structure for end of life, and family wealth advising addresses the financial decisions along the way.
How much can I give to my children tax-free each year?
You can give up to the annual gift tax exclusion amount, set by the IRS and indexed for inflation, to each child each year without filing a gift tax return or using any of your lifetime exemption. The most current figure is available from the IRS, and married couples can combine their exclusions to give twice as much per recipient. For individuals and families, direct payments of tuition or medical expenses made to the institution or provider typically do not count against either limit. Gifts above the annual exclusion are not necessarily taxable but reduce the remaining lifetime gift and estate tax exemption. Tax rules are subject to change and should be reviewed with a qualified tax professional.
What is the best way to give money to grandchildren?
The best way to give money to grandchildren depends on what you want the gift to accomplish, the age of the grandchild, and your own tax situation. Common approaches include direct cash gifts within the annual exclusion, 529 contributions for education (including five-year superfunding), direct payment of tuition or medical expenses to the institution, custodial accounts (UTMA/UGMA), and trusts that direct how and when the funds are used. Each option has different rules for control, tax treatment, and what the funds can be used for. Your adviser can help you evaluate which approach fits your goals, coordinate the tax treatment with your CPA, and work alongside your estate planning attorney when a trust is involved.
What is 529 plan superfunding?
529 plan superfunding is a strategy that allows a donor to contribute up to five years of annual gift tax exclusions to a 529 plan in a single year, without triggering federal gift tax. The current annual exclusion amount is set by the IRS and indexed for inflation. For individuals and families looking to fund a child’s or grandchild’s education, superfunding moves a meaningful amount into a tax-advantaged account in one year, where it has decades to compound before education expenses begin. The contribution is also removed from the donor’s taxable estate, the 529 assets grow tax-free, and qualified withdrawals for education are tax-free at the federal level, with many states adding their own income tax benefits. Superfunding requires filing IRS Form 709 in the year of the contribution and is typically coordinated with your CPA.
What is a living trust and how does it work?
A living trust is a trust created during your lifetime that holds assets for your benefit while you are living and directs how those assets pass to others when you pass or if you become incapacitated. Most living trusts are revocable, meaning you can change or end them while you are alive. Families typically set one up to avoid probate (the public court process for settling a will), maintain privacy, and allow a successor trustee to manage finances without court involvement if you become incapacitated. A trust can also direct how and when funds reach a child or grandchild, for example staggered over time or with conditions for receipt, or simplify ownership of real estate held in more than one state. While the trust documents themselves are drafted by your estate planning attorney who will provide legal advice, your investment adviser can help you identify when a trust may be beneficial, work with you to fund the trust, and manage the assets inside it.
How Can I help My Aging Parents With Their Finances?
For many families, helping aging parents with their finances starts with conversations rather than action: when help might be wanted, what their preferences are about care and advisers, and what role they want you to play. As needs change, the next step is often getting legal authority to act on their behalf, such as power of attorney, joint account ownership, or being named as trustee. From there, the work can include managing investment accounts, coordinating retirement distributions, planning for care expenses, confirming beneficiary designations and account titling are current, and watching for warning signs that more help is needed. Additionally, there may be costs that fall on you to assist in caring for your parents if their estate is not enough. Your adviser can help you map how your parents’ finances support their care and identify what costs may fall to you, allowing you to adjust your investment approach as needed.
Should I tell my children about their inheritance?
Whether to tell your children about an inheritance is personal, and there is no single right approach. Some families share specific dollar amounts; others share the structure of the financial and estate plan, including who the key advisers are, the roles their children might have, and how decisions would be handled, without disclosing the numbers. What feels right for your family often depends on your children’s ages and financial maturity, your privacy preferences, and what you want them to understand before they need to act on it. Your adviser can help you think this through and facilitate or participate in these conversations when you are ready.
Disclosures:
Raffa Wealth Management, LLC, doing business as Raffa Investment Advisers (“Raffa”), is a registered investment adviser. Advisory services are offered only to clients or prospective clients where Raffa and its representatives are properly licensed or exempt from licensure.
This content is provided for informational and educational purposes only and is not intended as, and should not be construed as, personalized investment, tax, or legal advice, or a recommendation regarding any specific financial strategy. Any discussions of financial planning strategies, including gifting, trusts, education funding, or multi-generational wealth planning, are general in nature and may not be suitable for all individuals.
All investing and financial planning involve risk, including the possible loss of principal. There can be no assurance that any strategy will achieve its intended objectives. The outcomes of financial decisions depend on a variety of factors, including market conditions, tax laws, and individual circumstances, all of which are subject to change.
Certain information herein may reference current federal tax rules or general planning concepts. Tax laws are complex and subject to change, and their application can vary significantly based on individual situations. You should consult with a qualified tax professional regarding your specific tax circumstances. Raffa does not provide legal or tax advice. We may coordinate with your tax advisors, attorneys, or other professionals as part of a broader planning process, but you remain responsible for obtaining advice from your own qualified professionals.
Examples or descriptions of planning strategies (including, but not limited to, lifetime gifting, 529 plans, trusts, or education funding approaches) are provided for illustrative purposes only and do not reflect actual client results or guarantee any future outcome.
For additional information about Raffa, including a description of services, fees, and important disclosures, please review our current Form ADV, available upon request or at www.adviserinfo.sec.gov.
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