For high-net-worth families, building wealth is just the beginning. Keeping that wealth safe for children, grandchildren, and future generations takes thoughtful legal and tax planning. Without the right structure, assets can shrink due to estate taxes, creditor claims, divorces, poor financial choices, or unnecessary transfers. Many families we work with want their estate plan to do more than just divide property after death. They hope to set up a lasting structure that protects what they have built and still allows future generations to benefit from the family’s wealth.
At Bernard Law P.C., we see multi-generational planning as a team effort, not just a stack of documents. Wills, trusts, beneficiary choices, business interests, life insurance, and tax planning all need to fit together. For families in Suffolk County with significant assets, especially those connected to both New York and Florida, the laws and tax rules can make a big difference in how long family wealth lasts.
Long-Term Trust Planning Can Keep Assets From Passing Outright To Each Generation
One of the most effective ways to preserve family wealth is to avoid automatically distributing substantial inheritances outright. When assets pass directly to a child or grandchild, those assets generally become subject to that beneficiary’s personal financial circumstances. Future divorces, lawsuits, creditor problems, poor spending decisions, and estate taxes at the beneficiary’s later death may all affect what remains for the next generation.
A well-designed continuing trust can help avoid these risks. Rather than giving a beneficiary full ownership right away, the trust holds assets for their benefit and lets a trustee make distributions based on clear rules. The beneficiary can receive income, principal, or both, while the rest of the assets stay in the trust for future generations.
New York Estates, Powers and Trusts Law § 7-1.17 establishes formal requirements for the execution of lifetime trusts. Once a trust exists, New York EPTL § 11-1.1 gives fiduciaries substantial authority to manage, invest, sell, and otherwise administer trust property, subject to the governing instrument and applicable fiduciary duties.
How a trust is set up is just as important as having one. Families should carefully consider how distributions are made, who will serve as trustee, how much control beneficiaries have, and what happens when one generation passes away.
New York Estate Tax Requires Planning Before Wealth Transfers Between Generations
Estate tax planning is particularly important for affluent New York families. New York Tax Law § 952 imposes an estate tax on qualifying New York estates, and New York maintains its own basic exclusion amount separate from the federal estate tax system. For deaths occurring in 2026, New York’s basic exclusion amount is $7.35 million.
The New York system also contains an important feature sometimes referred to as the estate tax “cliff.” Under Tax Law § 952, the available credit is gradually reduced when the taxable estate exceeds the basic exclusion amount and disappears once the estate exceeds 105 percent of that amount. For families close to or above the threshold, relatively small changes in estate value can therefore create significant tax consequences.
Long-term planning might include lifetime gifts, well-structured irrevocable trusts, marital and charitable planning, business succession, or other strategies, depending on the family’s needs. The right approach should fit the estate’s size and makeup, not just focus on lowering taxes.
New York Tax Law § 954 also requires attention to certain taxable gifts made within three years of death. This makes timing an important part of advanced estate tax planning. Waiting until someone’s health has seriously declined can substantially limit available options.
Beneficiary Protection Is Often Just As Important As Tax Reduction
High-net-worth families frequently begin the planning process by focusing on estate taxes. We encourage them to consider another question as well: what could happen to the inheritance after a beneficiary receives it?
An outright inheritance may expose family assets to circumstances that the person creating the estate plan never intended. A beneficiary might later divorce, experience financial problems, face litigation, or make poor investment decisions. Simply giving a beneficiary several million dollars may therefore provide less long-term protection than leaving those assets in a carefully constructed trust.
A multigenerational trust can allow assets to remain available for a beneficiary’s health, education, support, housing, and other needs without necessarily transferring complete ownership. Proper drafting can also distinguish between giving a beneficiary access to wealth and giving that beneficiary unrestricted control over it.
This is particularly valuable when different beneficiaries have different financial abilities. One child may be an experienced business owner, while another may have difficulty managing money. A high-quality estate plan does not need to treat every beneficiary identically if identical treatment would produce poor results.
New York Limits How Long Certain Trust Interests Can Continue
Families interested in multigenerational trusts also need to understand New York’s rule against perpetuities.
Under New York EPTL § 9-1.1, certain future property interests generally cannot remain unresolved indefinitely. The statute applies traditional limits based upon lives in being plus 21 years. This can affect how long certain New York trusts may continue and how interests for later generations are structured.
This issue is particularly important for families who use the term “dynasty trust.” A trust marketed as lasting indefinitely may not produce the same result under every state’s law. The governing jurisdiction can therefore become a significant planning decision.
Florida law differs considerably. Florida Statutes § 689.225 permits certain trusts created after December 31, 2000 to use a substantially longer perpetuities period. For New York families who later establish Florida domicile or maintain meaningful connections with both states, the choice of governing law deserves careful analysis rather than an automatic assumption that one state’s trust structure is appropriate.
Business Succession Must Be Integrated With The Estate Plan
For many high-net-worth families, a significant percentage of family wealth is tied to a closely held business rather than cash or marketable securities. That creates a different set of problems.
The next generation may not have equal interest or ability in operating the company. One child may work in the business while another does not. Dividing ownership equally without addressing management authority, voting rights, liquidity, and future buyouts can create conflict and potentially damage the company itself.
A sophisticated estate plan should coordinate ownership transfers with shareholder agreements, operating agreements, insurance arrangements, trusts, and tax planning. The objective is not merely to transfer business interests at death. It is to preserve the value of the business while treating family members in a manner consistent with the client’s intentions.
Succession planning should also begin before retirement or incapacity. Waiting until the founder can no longer participate often leaves the family with fewer options.
Multigenerational Planning Should Be Designed Around The Family, Not A Standard Formula
There is no single trust or tax strategy that works for every high-net-worth family. A family with investment assets has different concerns from a family whose wealth is concentrated in real estate or a closely held company. Families with children from prior marriages may require additional safeguards. New York snowbirds may need coordinated planning involving Florida property, domicile, and trust law.
We believe the strongest multi-generational plans begin by identifying what the family actually wants the wealth to accomplish. Tax reduction may be important, but so are control, flexibility, beneficiary protection, and preservation of family assets.
The ultimate objective is not simply to transfer wealth once. It is to create a structure capable of protecting that wealth through changing family circumstances, tax laws, and multiple generations.
New York Trust Frequently Asked Questions
What Is A Multi-generational Trust?
A multi-generational trust is generally designed to hold and manage assets for more than one generation of beneficiaries. Instead of distributing the entire inheritance to children, the trust may continue holding assets for their benefit and later for grandchildren or other descendants. The precise duration, distribution provisions, and tax treatment depend upon the governing law and the trust’s terms.
Can A Trust Protect An Inheritance From A Beneficiary’s Divorce?
A properly structured trust may provide meaningful protection, but the result depends heavily on how the trust is drafted and how the beneficiary handles distributions. Assets retained inside a properly administered trust may receive greater protection than assets distributed outright and mixed with marital property. Families concerned about divorce should address that issue when the trust is created rather than after a beneficiary’s marriage begins experiencing problems.
Can High-Net-Worth Families Avoid New York Estate Tax?
Estate tax exposure can often be reduced through proper planning, but there is no universal strategy that eliminates the tax for every family. New York Tax Law § 952 establishes the state’s estate tax and basic exclusion structure. Lifetime gifting, irrevocable trusts, marital planning, charitable strategies, and business succession techniques may all be considered depending upon the family’s assets and objectives.
Should Children Be Trustees Of Their Own Inheritance Trusts?
Sometimes, but not always. Giving a beneficiary trustee powers can provide flexibility and convenience, but excessive control can weaken some of the protections the trust was intended to provide. Some families use an independent trustee, co-trustees, or different trustees for particular decisions. Trustee selection should be based upon the purpose of the trust rather than simply selecting the oldest child.
What Is A Dynasty Trust?
The term generally refers to a trust intended to preserve assets for multiple generations rather than distributing everything outright at each generation. However, the permissible duration of a trust depends upon applicable state law. New York EPTL § 9-1.1 limits certain future interests under the state’s rule against perpetuities, while Florida law provides considerably longer potential trust duration in certain circumstances.
Does Moving From New York To Florida Change Estate Planning?
It can. New York and Florida have different estate tax rules, trust laws, property laws, and domicile considerations. A move to Florida should therefore trigger a review of wills, trusts, powers of attorney, property ownership, beneficiary designations, and tax planning. Simply purchasing a Florida residence does not automatically eliminate every New York estate planning concern.
How Often Should A High-Net-Worth Estate Plan Be Reviewed?
We generally recommend periodic reviews and additional reviews whenever there is a major change involving wealth, family, tax law, business ownership, domicile, or property ownership. High-net-worth plans are particularly sensitive to changes because relatively small legal or tax changes can have significant financial consequences.
Protecting Family Wealth With Bernard Law P.C.
Preserving wealth across generations requires more than preparing a will and deciding who receives each asset. Trust structure, estate taxation, beneficiary protection, business succession, fiduciary selection, and the laws governing long-term trusts can all affect whether wealth remains within the family.
At Bernard Law P.C., we help high-net-worth individuals and families develop customized estate plans designed around their assets, family circumstances, and long-term objectives. From our Shoreham, New York office, we serve clients throughout Suffolk County and assist families with sophisticated New York estate planning as well as planning concerns involving New York and Florida.
If you are concerned about protecting family wealth for your children, grandchildren, and future generations, we can help you evaluate the legal and tax strategies available to you. Thoughtful planning today can provide greater control over how family assets are managed and preserved long after the first transfer occurs. Contact our Suffolk County estate law attorney at Bernard Law P.C. by calling (631) 378-2500 to schedule a free consultation.
