By Brian Bloxom, ChFEBCSM
Have you considered what will happen to the wealth you’ve built once it passes to the next generation? Legacy means different things to different people, but from a financial perspective, it often comes down to how assets are transferred and whether they continue to support your family as intended. Many families discover that passing wealth isn’t as simple as it seems. Without thoughtful planning, assets that are shielded today can become vulnerable once they change hands.
The good news is that effective wealth transfer strategies can help bring clarity and structure to this process. While transferring wealth can feel complicated, the right approach can simplify decisions, reduce potential challenges for your heirs, and help your legacy carry forward the way you envision. Below are several steps to help you create a plan (and future) you can feel confident about.
Make Direct Payments
Simply making direct payments for your children or grandchildren’s expenses is one of the easiest ways to transfer your wealth without the hassle of taxes. Many institutions will allow you to pay your grandchildren’s tuition directly from your account. You can also conveniently take care of other important expenses, such as medical expenses, by automating payments to their healthcare provider.
When you make this sort of payment to an organization or institution, it helps you bypass the burden of gift tax, which can be a hefty price to pay on your assets. However, if you gift the money directly to the recipient, you might still be subject to gift taxes.
Give Annual Gifts
Another way to transfer wealth during your lifetime is through annual gifting. Making gifts can help gradually reduce the taxable value of your estate while allowing you to see your loved ones benefit from your support today.
For 2026, you can gift up to $19,000 per recipient per year without needing to file a gift tax return. Married couples who elect to split gifts can give up to $38,000 per recipient annually. Consistently using the annual exclusion can be an effective way to transfer wealth to the next generation over time.
If you give more than the annual limit, the excess amount is applied to your lifetime gift and estate tax exemption rather than triggering an immediate tax. For 2026, the lifetime exemption remains $15 million per individual (or $30 million for married couples). You are only required to pay gift tax after this lifetime exemption has been fully used. However, gifts above the annual exclusion still require filing a gift tax return so the IRS can track your remaining exemption.
Another popular strategy for transferring wealth to children or grandchildren is contributing to a 529 college savings plan. These plans include a special rule that allows you to “front-load” five years’ worth of annual gifts at once. In 2026, this means an individual can contribute up to $95,000 to a beneficiary in a single year (or $190,000 for a married couple) without incurring gift taxes, provided no additional gifts are made to that beneficiary during the five-year period. Funds can then grow tax-deferred and be withdrawn tax-free when used for qualified education expenses.
Irrevocable Trusts
Creating a trust is another way to transfer wealth to the next generation. To oversee the use of your assets, you can create a trust with specific guidelines for passing your wealth to beneficiaries.
When your estate is significant, an irrevocable trust comes in quite handy. You transfer all your assets from your estate to your trust, thereby bypassing estate tax. Additionally, when you accrue income on the assets you hold in your trust, you are not personally responsible for paying taxes since the trust is considered a separate entity. As such, the trust will be taxed directly on any retained income and beneficiaries will be taxed on any distributions of income. This is an effective wealth transfer strategy since beneficiaries are typically in lower tax brackets.
It’s also important to note that irrevocable trusts are permanently binding; you cannot change any of the terms nor beneficiaries. Once you have handed over your wealth to the trustees, they manage and transfer it according to your specific wishes.
Consider the Gift of Time
I’m noticing more and more that it’s not as much about leaving money to your children as it is enjoying the fruits of your lifelong labors through quality time with them while you’re still alive. Experiences shared as a family will mean much more to your kids than a fancy car on their 16th birthday. Rather than safeguarding your wealth to be left after you’re gone, consider buying a vacation home where everyone can gather or taking your whole family on that dream trip to Paris. These experiences will produce lifelong memories that are likely more impactful than leaving them a larger inheritance.
Wealth Transfer Strategies Designed Around Your Goals
At Sentinel Wealth Partners, we understand that planning for the future can feel overwhelming, especially when you want to be confident that the wealth you’ve built can support the people you care about most. Our goal is to provide thoughtful, goal-focused guidance, including personalized wealth transfer strategies, so you can move forward with clarity and peace while creating a meaningful legacy for your loved ones.
We’d welcome the opportunity to learn more about your goals and explore how a well-designed plan can help you shield and pass on what matters most. Reach out to us today by calling our office at 703-832-0164, sending an email to brian@sentinelwealthpartners.com, or using our online calendar.
About Brian
Brian Bloxom is an Independent Financial Advisor, Chartered Federal Employee Benefits ConsultantSM (ChFEBCSM) and Chartered Retirement Planning Counselor℠, CRPC® professional now celebrating 30-plus years in business. He founded Sentinel Wealth Partners to serve retirees, individuals approaching retirement, and individuals managing complex retirement plans such as company plans or federal benefits plans. His expertise and dedication to helping his clients achieve their goals make him a trusted resource that will help you feel confident in your customized retirement plan. Brian’s mission is to be available to his clients—all the time. He’s here to solve your problems, relieve your anxiety, and give you optimism for retirement. Because ultimately, your retirement should be about well-deserved enjoyment, and not about stress or anxiety.
Brian has also been serving as the President of the Salvation Army Advisory Council in his area for the last five years. In his free time, you can find him spending time with his wife, Jessica, and their two sons, Spencer and Preston. In addition to being actively involved in recreation sports coaching for kids, he enjoys serving in his community, golfing, and relaxing at his vacation home at Lake Anna, VA. To learn more about Brian, connect with him on LinkedIn.
Securities offered through Registered Representatives of Cambridge Investment Research, Inc., a broker-dealer, member FINRA/SIPC. Advisory services offered through Cambridge Investment Research Advisors, Inc., a Registered Investment Adviser. Sentinel Wealth Partners and Cambridge are not affiliated. Sentinel Wealth Partners is not engaged in the securities business. Cambridge does not offer tax or legal advice.