Passing Wealth with Purpose: Succession Without Stress

Key Takeaways    

• Estate planning success requires preparing heirs, not just tax optimization strategies.  

• Most wealth transfers fail by the second or third generation due to unprepared heirs, not faulty planning.  

• Start small, start early, and clarify roles when it comes to getting children comfortable with the estate planning process.  

• Document family values and write a wealth-building story to ensure respectful inheritance treatment. 

Throughout 2025, estate planning has been a consistent topic of conversation. Many people expressed concern to me about how potential changes in estate tax law at the end of 2025 might impact them.  The passage of the One Big Beautiful Bill Act (OBBBA) on July 4, 2025, resolved many of these concerns. The federal estate exemption amount was increased to $15 million per person from $13.99 million, not lowered as many feared. However, just because the exemption amount is higher doesn’t mean estate planning conversations need to stop. While tax planning is a big part of implementing an estate plan, communicating values and preparing the next generation to inherit is also essential.  

Research shows that 70% of intergenerational wealth transfers fail by the second generation and 90% fail by the third generation. This alarming failure rate isn’t the result of poor legal or tax planning. It’s the result of heirs being unprepared to receive their windfall and/or family dynamics breaking down.  While tax planning is a big part of how we help our clients, communicating values and preparing heirs to inherit is just as valuable.    A few months ago, I met with a prospective client. When I brought up the subject of estate planning and what they wanted to see happen with their money when they pass away, they said, “We don’t really talk about finances with our children.”   This is something we hear frequently. For some people and families, talking about money is taboo. Many people assume that the estate documents they create will do the talking and that they don’t want to dwell on what will happen with their money when they pass away. Others are concerned that if they tell their children they are going to inherit a large sum of money, their children will lose their ambition.

There are many other reasons people choose to avoid having estate planning conversations. One of the benefits we provide for clients is personalized coaching and facilitating a dialogue between the generations. We know how to start these sensitive conversations in a way that isn’t intrusive and that helps convey the family’s values across generations. The values often include committing to education, working hard, being entrepreneurial, living within your means, and being supportive of charities.    

When heirs don’t understand the “why” behind their family’s estate plan, or if they feel like passengers rather than participants in the process, then tension, confusion, and fractured relationships often follow. We prefer a different strategy to avoid these pitfalls. 

Getting Started 

We realize that talking about our estates and mortality is uncomfortable for many people. Here are some suggestions for getting the ball rolling:   

1. Start small. Every year, my family has a fire drill at home. My teenage children know where the extinguishers are, where the fire ladders are, and where our family meet-up spot is when we get out of the house. When my children are older, we will have a financial emergency drill every year. We’ll make sure everyone knows where the important documents and safe deposit boxes are located. They don’t need to know the contents at this stage; they just need to know where to look. We have found millions of dollars for clients over the years in unclaimed property simply because families weren’t aware of assets their parents owned when they passed away. As part of the drill, parents should share where financial accounts are held. Novi clients typically provide their children with our business card. We know where everything is located and have a clear understanding of what needs to happen next. 

2. Start early. Teach them to understand the principles of disciplined, evidence-based investing rather than chasing hot trends. Use a custodial account or a Roth IRA for younger children to model these principles and see them in action. As children get older and begin to start families of their own, you can host family meetings to walk through the principles of your estate plan. You don’t need to cover the details or values, just the big picture of what is important to you.   

3. Clarify roles. Estate planning contains lots of jargon. Help your children by making sure all family members are clear about roles and responsibilities, such as executor, trustee, power of attorney, healthcare proxy, etc., and why each person was selected for their role. The decision could be based on proximity, expertise, or personality, among other factors. Regardless of the reason, it is helpful to know who is responsible for what when the time comes to deal with the death of a loved one. Mourning them is hard enough. Having the additional stress of not knowing what to do next is unnecessary. 

4. Document your values. This strategy may not be for everyone, but I have found it to be a powerful experience for those who choose to do so. Consider writing down the values you are trying to pass along to your heirs. This exercise goes beyond a will; it is about sharing the story of how you built your wealth and how you hope it empowers future generations. Share what you feel contributed to your success. I’ve found that when heirs inherit a windfall, they’re more likely to treat it with respect if they know about how the money was created and what it took to accumulate it.  

Conclusion 

 At Novi, we’re not just investment managers. We make sure estate plan transfers happen smoothly so taxes and wealth are around to help future generations. OBBBA has changed some of the tax rules, but the most important rules are the ones you teach your heirs. Contact me anytime if you’d like to review your financial plan or life goals. Passing wealth with purpose  

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RYAN M. VOGEL, CFP® is the CHIEF PLANNING OFFICER, PARTNER at Novi Wealth