Legacy Planning

You’ve spent 40 years building wealth—saving, investing, buying real estate, building a business. You’re on track to leave your kids a significant inheritance, maybe $2-3 million. But you’ve never actually thought through what you want that money to accomplish after you’re gone. Should it be split equally? What if one kid is financially responsible and another isn’t? What about grandkids? Should you skip a generation? Do you want to encourage certain behaviors (education, entrepreneurship) or discourage others (dependency, entitlement)?

Legacy planning isn’t just about leaving money—it’s about deciding what you want your wealth to accomplish after you’re gone. Most Phoenix families default to “split it equally among the kids” without thinking through whether that actually makes sense for their family situation.

We help Arizona families think through legacy planning decisions—how to structure inheritance, whether to include incentives or conditions, how to balance fairness with individual needs, and what kind of impact they want their wealth to have on future generations.

Equality vs Equity

Most parents assume they should leave equal amounts to each child. That sounds fair on the surface, but it doesn’t always make sense.

What if one child is a doctor making $500,000/year and another is a teacher making $50,000? Equal inheritance might mean the doctor buys a vacation home while the teacher uses it for retirement security. Is that the impact you wanted?

What if one child has special needs and requires ongoing financial support? Leaving equal amounts might mean the special needs child runs out of money while the others are fine. An unequal distribution (more to the child who needs it) might make more sense.

What if you’ve already helped one child with college, a down payment on a house, or starting a business? Should that be counted as part of their inheritance, or should everyone still get equal amounts at your death?

These are hard questions, and there’s no universally right answer. Legacy planning is about figuring out what makes sense for your family, not following generic rules.

Incentive Trusts: Encouraging Good Behavior

Some families use incentive trusts to encourage certain behaviors. The trust might match earned income (you get $1 from the trust for every $1 you earn), encourage education (distributions for college or graduate school), or support entrepreneurship (funds available for starting a business).

Incentive trusts can work well if designed carefully, but they can also backfire if too restrictive. A trust that only distributes money if the beneficiary has a traditional job might discourage a child from pursuing art, nonprofit work, or stay-at-home parenting—things you might actually value.

We help families think through whether incentive trusts make sense and how to structure them so they encourage the behaviors you want without being overly controlling from the grave.

Skipping a Generation: Leaving Money to Grandkids

Some grandparents choose to leave money directly to grandkids instead of (or in addition to) their children. This might make sense if your kids are financially stable and don’t need the money, or if you want to provide for grandkids’ education or early adult years.

Skipping a generation can also have estate tax benefits for very wealthy families, though most Phoenix families aren’t in estate tax territory (federal estate tax only applies above $13.6 million per person in 2024).

The downside: your children might feel slighted if you bypass them and give everything to grandkids. This needs to be communicated clearly to avoid family conflict.

What We Do

We help Phoenix families think through legacy planning decisions. That includes having honest conversations about what you want your wealth to accomplish, how to balance equality vs equity, whether incentive structures make sense, and how to communicate your decisions to family members.

We coordinate with your estate attorney to implement legacy planning decisions through trusts, beneficiary designations, or other estate planning tools. We don’t make these decisions for you—we help you think through the options and consequences so you can make informed choices.

The Bottom Line

Legacy planning is about more than just dividing assets. It’s about deciding what impact you want your wealth to have on future generations. Most Phoenix families default to equal distributions without thinking through whether that actually aligns with their values and family situation.

Want to think through what your wealth should accomplish after you’re gone? Let’s talk about legacy planning.