The Great Wealth Trickle Is Already Here. Is the Plan Built for It?
The Wall Street Journal has put a name to what many families are already doing: giving now, in smaller amounts, instead of waiting. Once helping now becomes regular, substantial or unequal, writing checks stops being the smartest way to do it.
The Wall Street Journal's Rachel Louise Ensign recently put a name to something a lot of families are already living. The great wealth transfer, the long awaited passing of trillions from older Americans to their heirs, may be on hold because people are living longer. The great wealth trickle is well under way. Readers described paying for preschool, rent, down payments, tuition, cars and family travel while they are still around to watch the impact. One Arizona couple estimated they had given roughly $700,000 to six children and fifteen grandchildren. Older Americans hold about $110 trillion, more than any other age group, and many of them have decided not to wait.1
That generosity is wonderful. It is also, in most of the families I see, structured badly or not at all.
When a check stops being enough
A one time gift to help with a car needs no structure. The picture changes once the giving becomes regular, substantial or unequal among children. Three problems show up.
- Tax drift. The annual exclusion is $19,000 per recipient in 2026, or $38,000 for a married couple who elect to split gifts.2 Tuition and medical expenses paid directly to the school or provider do not count against that limit at all.3 Everything above those lines is a taxable gift that must be reported on Form 709 and eats into the $15 million basic exclusion amount.4 Families who give casually often have no idea how much exclusion they have already used.
- Protection. Cash handed to a child is exposed to that child's creditors, lawsuits and divorce. The same money held in a well drafted trust for the child's benefit generally is not.
- Fairness. The child who needed help with a down payment got $150,000. The child who did not ask got nothing. Unless the plan accounts for it, the Will or trust at the end will either double the inequality or require a painful true up nobody documented.
How trusts turn generosity into strategy
The tools below are the ones that most often fit a family that is already giving.
- Grantor trusts for growth. Grantor retained annuity trusts and sales to intentionally defective grantor trusts move the future appreciation in a home, a business or a concentrated stock position to the next generation with little or no gift tax, instead of handing over cash a piece at a time.5
- Life insurance for equalizing. An irrevocable life insurance trust, usually with Crummey withdrawal rights so that premium gifts qualify for the annual exclusion, can fund education or equalize inheritances among children with different needs while keeping the proceeds outside the taxable estate.6
- Charitable vehicles. Grantor charitable lead annuity trusts and charitable remainder unitrusts let a family support causes it cares about, create an income stream and move wealth efficiently.7
- Special needs trusts. A third party supplemental needs trust supports a child or grandchild with a disability without disrupting means tested public benefits.
- Nongrantor trusts for income tax. Where a founder expects a liquidity event, nongrantor trusts can each claim a separate qualified small business stock exclusion. Where state income tax is the issue, a nongrantor trust sited in a state with no income tax can help.8
- Asset protection trusts. For a family that wants to keep access while moving assets out of harm's way, a domestic asset protection trust in a state such as South Dakota may fit.
The better question
The real question is not how much to give. It is how to give in a way that is protected, tax aware and true to the family's values. A gift solves today. A well built trust can solve today and protect tomorrow. If you are already helping the next generation, make sure the structure keeps pace with the generosity.
Notes
- Rachel Louise Ensign, Forget the Inheritance. These Readers Are Passing Down Their Money Now, Wall St. J. (June 7, 2026). ↩
- IRC section 2503(b); Rev. Proc. 2025-32 (2026 annual exclusion of $19,000); IRC section 2513 (gift splitting). ↩
- IRC section 2503(e). ↩
- IRC sections 2010(c), 6019; Rev. Proc. 2025-32 (2026 basic exclusion amount of $15,000,000). ↩
- IRC section 2702 and Treas. Reg. section 25.2702-3 (GRATs); Rev. Rul. 85-13, 1985-1 C.B. 184 (sales to grantor trusts). ↩
- IRC section 2042; Crummey v. Commissioner, 397 F.2d 82 (9th Cir. 1968). ↩
- IRC sections 170(f)(2), 664. ↩
- IRC section 1202. ↩
Terry L. (T. L.) Turnipseed, J.D., LL.M., CTFA, is a tax, trust and estate attorney in Fort Lauderdale, Florida, and Head of Estate and Tax Planning at Alta Trust Company. He is a former tenured professor of law at Syracuse University. Reach him at tl@turnipseed.law or on LinkedIn. This article is general information, not legal advice.