My wife and I often discuss what kind of values we want to instill in our children and how we imagine the future in 20 or 30 years. What do we want our family to be like? What are our priorities and key values we want to share with our children? How do we prioritize our time and money? For example, do we spend money on our hobbies and travel or private schools? Do we live in a more expensive area near family or a less expensive area where we have less support? I suspect many of you have these conversations as well. There are no easy answers.
Because we value higher education, one thing we do, and I recommend to friends to do as well, is to save for college in a 529 account. Money in a 529 can be contributed tax-free and grow and be withdrawn tax-free. This savings vehicle can reduce taxes to encourage college and post-graduate education and limit debt for the kids. How we spend or save our money can speak to our values and priorities.
Similarly, how we save for and organize our estates can continue that message. Do we prefer to gift during our lifetime (helping kids with college or a down payment on a home) or give them money as an inheritance? Do we structure a trust to incentivize or encourage certain behaviors (or disincentivize others)?
One high net worth family whose father made millions on Wall Street worked together to design trust terms. They decided to organize their trust to pay for any educational expenses and contribute a down payment for a primary residence up to a certain amount. The grandfather joked that he didn’t expect the parents to choose such expensive nursery schools - but the rules of the trust incentivized that choice! Also, who but a NYC parent could imagine a 60k dollar PreK!
Warren Buffett made the following recommendation for estate planning, for those who have the means to do so: “Leave the children enough so that they can do anything but not enough that they can do nothing.”
You can place many types of rules and requirements into a trust to align to your values. For example, you could provide a stipend to your children and grandchildren if they work in a public interest field, such as education or healthcare, to encourage following one’s passion. You could create a trust to keep a family vacation home maintained (paying taxes, maintenance, repairs, etc.) so it would stay in the family for a while and encourage get-togethers. You could provide a bonus or supportive payment for a marriage or birth of a child.
The challenge is creating incentives that aren’t necessarily achievable. For example, giving a bonus for a high grade point average in college is noble, but what if there is a hard-working child with special needs who never quite gets there.
Another way to promote your values into the future is to create a charitable foundation. This is both an incredible way to reduce taxes from your estate and to allow your friends and family to create a charitable legacy, even after you are gone.
The first step is to work with your family to decide what you prioritize (i.e. your values). Then, work with a legal professional to make those plans a reality.
Out in the Community
I was pleased to participate in Family Wealth Report's Investment Summit 2025 last month. The panel (pictured below) focused on the Intersection of Health and Wealth, including the health needs of aging parents, unexpected medical events, and ensuring support across generations.
Also in November, I was pleased to be part of Williams College alumni’s “Back to Class” webinar program. As the second presenter in a philanthropy series, I spoke on “Giving Options to Support Your Life Goals.” The latest version of Williams “Giftwise” report featured my article on “Legacy Giving through Beneficiary Designations.”
In December, I will speak to a group of certified financial planners at Neuberger Berman on the basics of elder care and how to help clients and their families plan/prepare effectively for a health-related event, including Housing Options, Support Services, and End of Life Planning.
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