Wealthy Families Host Surprise 'Trust Reveals' With Their Heirs --- The superrich want to pass on generational wealth but keep their children motivated

 

 

“Surprise! You have a $100 million trust fund.

 

That is the message at "trust reveal" meetings hosted by wealthy families and advisers around the country. These days, business is booming.

 

Luke Jernagan, an Episcopal minister who now works at Matter Family Office, orchestrates these at the firm's office or clients' homes, sometimes meeting with parents and children four or five times beforehand to help them write scripts and ease heirs into the news. Children are often told a financial update is ahead but don't know exact details of their life-changing sums.

 

"I've never been to one of these where people weren't teary," said Jernagan, whose firm holds more than 30 reveals a year.

 

Baby boomers, who accumulated unprecedented wealth during decades of economic expansion and stock-market gains, are now passing this money down. More than $100 trillion will move from older generations to offspring and charities through 2048, according to Cerulli Associates.

 

Around $62 trillion will stem from high-net-worth individuals, who make up around 2% of all households.

 

The task of transferring this wealth, and communicating it with children, can be tricky. That is why delivering the news was long left to trustees or lawyers, or in envelopes with details of how to access cash.

 

While luxe vacations and private schooling give children clues that they are wealthy, many families don't share their true net worths, fearful of spoiling them or dimming their motivation.

 

"Hugely wealthy parents should leave their children enough so they can do anything but not enough that they can do nothing," Berkshire Hathaway's Warren Buffett once wrote.

 

Bankers, estate lawyers and money managers for the superrich said they are increasingly establishing complex trusts for heirs and helping families navigate thorny money conversations. When the details are set, the advisers help tell millionaires' and billionaires' children they will never have to worry about money.

 

Parents sometimes prefer their cadre of advisers be around for the sensitive conversations to signal they are diving into a business matter, even if the agenda is "update from mom and dad."

 

U.S. trusts and estates have generated $290 billion in income for beneficiaries this year, on track for a record in data going back to 2003, according to IBISWorld, an industry tracker.

 

The trusts are stuffed with everything from stocks, bonds and cash to ski lodges and family heirlooms. Income from trusts themselves can help pay for homes to keep them in the family. Others hold businesses or other illiquid assets.

 

Sunil Tolani, a 57-year-old hotel entrepreneur in Orange County, Calif., has put the Holiday Inn Express he owns and other hotels alongside personal homes, gold jewelry and watches in a trust worth tens of millions of dollars. It includes his wife's luxury Hermes handbag and is designed to be passed down to two sons when they reach certain ages.

 

He hopes to prevent infighting between family members upon his passing. "The biggest gift you can give to the people you love is to create an estate plan," Tolani said.

 

Families can tailor estate plans as they please. Parents sometimes write a "letter of wishes" to accompany the trust, indicating how they hope the money will be used.

 

Jen Galvagna, head of trust, estates and tax at Bank of America, worked with a trust that specifically funded a child's equestrian hobby. The roughly $75 million fund allowed her client's daughter to buy and board horses -- which can cost more than $100,000 each -- care for them medically, hire instructors and even insure the animals. It also allowed for distributions tied to the daughter's education, health and other expenses.

 

Another family that Bank of America worked with put a priority on travel, as parents explicitly stated they hoped the children would tap funds to roam the world. A trust might provide for a $300,000 annual disbursement just for vacations.

 

Trusts can match the incomes of heirs to motivate them to keep working.

 

 Some contain achievement-based provisions, giving monetary bonuses if a descendant graduates with a certain grade-point average, or allowing heirs to use the cash only if they earn a four-year degree. A trust might help with startup costs for a career launch, such as expenses for a wardrobe, relocation and transportation.

 

Trusts can also grant control to the wealthy. Families can require beneficiaries to stay sober, or employed, to benefit. Trust documents can specifically require children or grandchildren to take drug tests for cocaine or other substances before withdrawing cash.

 

"Everyday I have a conversation with clients who say, 'OK, I've gotten a massive check for $250 million. I've got two kids. How do I make sure they are not ruined?" said Daniel Griffith, director of wealth strategy at Huntington National Bank, who works with the bank's high-net-worth clients and said he is getting increased inquiries about the topic. "The trust is one way to put on some parameters," he said.

 

One popular structure for the ultrawealthy: the dynasty trust.

 

It is designed to transfer wealth across several generations -- potentially forever -- while avoiding estate and generation-skipping transfer taxes at each handoff.

 

One reason families start to disclose wealth to children is they suspect one of them might be on track to get married. Trusts can keep generational wealth within bloodlines.

 

Failing to plan discussions can get messy, which is why parents sometimes avoid the conversations. A Fidelity survey this year found that 68% of parents hadn't told their children what they would inherit, or if they would inherit anything at all. More than half hadn't discussed their net worths with their children. Like lottery winners, wealthy individuals fear their offspring might blow money they haven't had to toil for.

 

Some children are overwhelmed when they learn the news, while others feel guilt.

 

In one reveal, Galvagna helped share an estate with five children, preparing handouts for descendants outlining their shares. Each inherited one of the family's homes around the world, three of which were individually worth around $10 million. The parents tried to ensure inheritances were equal. For example, if a child received a more expensive home, the share of liquid assets such as cash and stocks dwindled.

 

Still, things grew heated.

 

"People were questioning why they got this house, and not the other house," Galvagna said, comparing each estate's proximity to the water, location around the world and even renovation status. "That one was ugly."” [1]

 

1. Wealthy Families Host Surprise 'Trust Reveals' With Their Heirs --- The superrich want to pass on generational wealth but keep their children motivated. Banerji, Gunjan.  Wall Street Journal, Eastern edition; New York, N.Y.. 02 Dec 2025: A11.