Celine Fitzgerald, a G3 family member at Webb & O’Neill Capital, meets annually with her family’s legal team to review estate plans.
Her parents’ estate plan is fairly well set, though they are making some adjustments now that Fitzgerald has children. And because of the trusts and partnerships set up by previous generations, Fitzgerald’s estate plan was largely set up for her.
“Now I’m trying to figure out how I will pass money to my children,” Fitzgerald says. “We’re at that phase now where we are trying to figure out how to be tax efficient for the G4s.”
As part of these conversations, Fitzgerald’s family is reconsidering two family limited partnerships that were set up decades ago. Tax law, regulations, and the structure of the family have all changed. Her life plans and her sister’s are part of the discussion.
“It’s good to be nimble and flexible,” Fitzgerald says. “What seemed really great 30 years ago is a little different now.”
This type of multigenerational estate planning conversation is not uncommon, says Shannon Zur, family office director for Vogel Consulting.
“In the past few years, I have seen a lot of coordination of estate plans across the generations,” Zur says. “What the grandparents are doing affects the parents, and then what the parents do affects the grandchildren. The grandchildren have to know what is flowing through, so they can plan appropriately for their kids.”
Fitzgerald wasn’t always part of these conversations. Before she and her father started their family office in 2019, her father and grandfather had done extensive estate planning, including putting money in the names of their children and creating generation-skipping trusts.
“I don’t think I really ever knew the meaning of any of that until after 2019,” Fitzgerald says.
When Fitzgerald turned 20, the family’s attorneys at the time sat down with her to tell her about money that was held in her name — and that she should not spend or use it.
“It was very jarring,” she says. “For a decade, I had no idea what my dad’s estate plan looked like.”
In the time since then, from her experience with her own family and conversations with other families, Fitzgerald has gained insight into how and why next-generation family members should be included in estate planning.
Education is a key starting point. Families working on multigenerational estate plans should start by making sure all family members know the basics of estate planning and financial planning, including wills and living trusts.
“Rising gens should definitely be hungry to search out information on their own,” Fitzgerald says. “Then they can go to their parents or grandparents with specific questions, like ‘Do we have a generation-skipping trust?’ The parents and grandparents want to feel like the kids are coming to them with some basic knowledge, instead of just asking, ‘What’s in your estate plan, and how much am I getting?’”
There are practical reasons to include the next generation in estate planning conversations: For one thing, surviving family members may change advisors immediately if they don’t know the advisors who have been serving the leading generation.
And if they are left in the dark about the purpose and structure of the estate, next-generation family members may not realize the intentions of the generations before them.
“If parents give a very small picture with no context, kids will be very confused,” Fitzgerald says, “They won’t understand the importance of the stewardship and the importance of passing the wealth down for multiple generations.”
Her work on the family office with her father gave her a clearer picture of the family’s portfolio.
“I could see that I want to preserve this and grow this, not only for my generation but for the next generation,” she says.
She and her sister also learned about the implications of taking distributions from their trusts — and decided that for the most part they would prefer to let the money grow.
“Parents have to explain that,” Fitzgerald says. “Kids have to be part of the meetings with the lawyers or accountants to understand what will happen if they do take distributions.”
Fitzgerald has spoken with rising gen members of some families whose parents will not tell them the details of their estate plans.
“Some people don’t know if their parents are leaving them anything. Even if they’re leaving it all to charity, it’s better to say something than nothing,” she says. “The beauty of communicating and giving your kid even just an observing seat at the table is that they really get to see their parents in action. I have so much more appreciation for my dad and grandpa because of being let in. Without that, kids really miss out on the storytelling: How did we get here? How do we want this wealth to grow? What do we hope you do with it?”
These discussions can include a broader conversation about the family’s values, as well as discussions about any charitable components of the estate plan.
“Kids don’t need to be at every meeting or part of every conversation, but I think you miss some of that family magic if you don’t give your kids the opportunity,” Fitzgerald says.