inheritance - Trust and Estate Planning Law Office

What to Do in 2026 When Your Kids Don’t Want to Take Over the Family Business

Many often assume that inheriting a family business is an amazing opportunity that is impossible to turn on; however, some people don’t desire such a responsibility. It is important to understand that sometimes, heirs will turn down inheriting a family business, whether to pursue other career paths or simply because they don’t have the passion or skills to run the business. Either way, there must be a plan set up in place to ensure that there aren’t financial losses and family conflict.

Fortunately, there are many estate planning tools in 2026 that can be used to avoid confusion and chaos. This article will walk through why heirs may decline this opportunity and the various options that are available for families to plan for such a case.

Why Heirs May Decline

There are many potential reasons why heirs may choose to decline taking over a family business. Some may lack interest in the industry, making the business seem more like an obligation than anything else. They will most likely not want to step into a leadership position in a business sector where they do not have the skills to effectively fulfill such a role.

Another reason heirs may decline is due to their geographical distance from the business. This simply makes it logistically challenging to effectively manage operations. Heirs may also already be committed to pursuing their own career. It is common for them not to be willing to abandon the work that they are doing and go into a completely different field.

A very significant concern that heirs have is the financial risk that comes along with running a business. Family businesses can be unpredictable, and it is understandable that not everyone wants to be in an industry like this. Many are only comfortable with consistency and want financial security; in this case, they may choose to remain in their current career. It is crucial that business owners have identified and understood these concerns in order to establish the proper plan that can accommodate these concerns instead of facing surprises in the future.

Succession Planning

One effective option that families look into is succession planning with non-family leadership. This is when the business owner appoints experienced professionals to handle day-to-day operations and manage the business overall, while the heirs still benefit from the profits while remaining as shareholders. We recommend this for when heirs do not feel prepared to fulfill leadership roles but still want to keep the business in the family. When creating a succession plan like this, it must outline the management responsibilities and expectations, and thoroughly explain procedures to ensure the company maintains growth and efficiency when put under the new leadership. In our opinion, this is the most efficient plan for families to preserve their legacy while still separating ownership from management and control.

Selling the Business

If it is confirmed that no heirs would like to take over the business, another option is to sell the business before death. When you initiate the sale during your lifetime, you are able to negotiate the best price and select the best person, in your professional opinion, to represent the values and mission of your business. Selling while you are still able to be in control of this process, ensures that the business is sold in a thoughtful way, where the business’s reputation and legacy will be preserved. Not only that, but this also gives you, as the business owner, the opportunity to fairly distribute the funds to your heirs. This aims to minimize future conflict and also ensures that the family members have an equal share of the business. In our professional opinion, this option offers peace of mind for the family and financial security for family members.

Understanding Trusts and Buy-Sell Agreements

The options that were discussed already are effective for families where family dynamics are simple, and it is known what the heirs want for their future; however, when it comes to families with more complex relationships, you may consider legal tools. If you place the business in a trust, a person you name as the trustee will manage the operations of the business until a sale occurs. This is often used if your heirs haven’t decided whether they would be fit to run the business. A trust holds the asset until the time comes where your heir can make a well-thought out decision. A buy-sell agreement, on the other hand, sets clear rules for who can buy a departing owner’s share. This can be a co-owner, business partner, or an interested child. It gives uninterested heirs a fair payout, avoids family disputes, and keeps the business in the hands of people dedicated to running it. Both of these legal strategies protect the business from instability and aim to reduce the emotional strain that may arise on families in the future.

What Steps to Take Next

You must have a clear and thorough plan set in place. Without this, your heirs will be forced to navigate their next steps with the business, while grieving. What you can do now is have an honest and open conversation with your heirs, exploring all of the different ownership structures and evaluate which tool best aligns with their desires and lifestyle. It is crucial that you are utilizing transparent communication so that your intentions are clear, both legally and in the relationship with your heirs. Early planning will also offer the opportunity to ensure that this entire process results in reduced complications, less legal costs, and a stable future for your business. The last thing you want to do is leave important decisions up to your heirs under pressure.

A family business isn’t just seen as a money-maker, this can be a representation of your family’s hard work, skills, and dedication. It must be in good hands. You must start your planning now. Talking to a professional will help to keep the business as a sensation, rather than a family dispute. Call (718) 333–2395 to speak with the Trust and Estate Planning Law Office to discuss your options, create the most effective plan for you, and most importantly, preserve your family legacy.

How to keep your money within

Planning for your future is imperative for preserving and passing on your wealth. An estate plan will not only allow you to secure your earnings for your loved ones but also save money in estate taxes. When leaving an inheritance, your heirs may be subject to various estate taxes and fees associated with passing on assets. The idea of estate planning may seem unnecessary to some, whether due to non-marital status, not having children, or a perceived lack of assets. However, these are misconceptions that underestimate the value of your estate. Everyone, regardless of their family situation and finances, has an estate that can benefit from estate planning services. By seeking the expertise of an experienced estate planning attorney, you can preserve your estate, retain its value, and strategically plan for the future.

Why is estate planning significant? An estate plan enables you to decide who will inherit your assets, how they will be distributed, make plans for your funeral and burial, as well as select guardians for your children. For individuals in single households without children, spouses, or living relatives, estate planning becomes even more crucial as you need to consider the future of your assets and healthcare. Planning ahead ensures you are prepared for any sudden life changes.

Initiating a Trust

For individuals with substantial estates or concerns about their heirs' responsibility with inheritance, creating a trust and appointing a trustee for asset distribution is critical. There are many ways to set up a trust, but an irrevocable trust provides the most tax benefits. In an irrevocable trust, the money no longer belongs to you but to the trust itself, which protects it from estate taxes. Another way to ensure your money stays within the family is by setting up a dynasty trust, which safeguards the money within your estate for future generations and shields it from divorce, lawsuits, and creditor claims. In New York state, a dynasty trust remains effective for another 21 years after the death of the last person for whom the trust was created. This trust not only avoids estate taxes but also the generation-skipping transfer tax.

Retirement Accounts to Roth Accounts

Leaving heirs with traditional 401(k) or IRA accounts can result in substantial tax bills. Under current laws, non-spouse heirs are required to withdraw all the money within the account within a ten-year span, potentially leading to higher taxes due to the increased taxable income. Converting traditional accounts to Roth accounts can help avoid these tax burdens. While the amount converted is subject to regular income taxes, withdrawals from Roth accounts are tax-free, providing long-term tax savings.

Plan for Long-Term Care Expenses

Long-term care expenses can significantly impact your assets and financial well-being. Incorporating long-term care considerations into your estate planning can help mitigate these costs. One effective strategy is to explore long-term care insurance options that provide coverage for medical and care expenses in the event of a chronic illness or disability. Additionally, Medicaid planning allows you to structure your assets and income in a way that qualifies you for government assistance while preserving your estate. Setting up trusts, such as irrevocable Medicaid trusts, can protect assets from being counted for Medicaid eligibility purposes. Proactive planning for long-term care expenses safeguards your assets and ensures that you receive the necessary care without depleting your estate.

In conclusion, estate planning is a multifaceted process that can save you money and provide financial security for your loved ones. By considering the various aspects of estate planning, such as trusts, retirement account conversions, and long-term care planning, you can strategically manage your assets, minimize tax liabilities, and protect your estate. Consulting with an experienced estate planning attorney is crucial to ensure that your estate plan is tailored to your unique circumstances and goals. Take the first step in securing your financial future by contacting the Trust and Estate Planning Office at (718) 333-2395.

How do Non-marital Children Inherit Wealth Under NY State law if their Parents Die Without a Will?

Loved ones are not always family by blood, especially as the traditional, “nuclear family” structure is fading in frequency. In the eyes of the law, a legal family may differ from what society typically defines as a family unit. While this distinction may seem unfair, it is important to understand that there are specific measures one must take to align legal status with emotional and familial bonds. When you die without a will, or die intestate, your assets go through the probate process and then are distributed according to the law. Not only do legal beneficiaries often lose money to probate fees, but New York State law only takes into account legally named children as beneficiaries. By creating a strong estate plan, you will ensure that those you love, no matter your relationship, will inherit the assets you believe they deserve.

New York State Intestate Law and Nonmarital Children

Intestate laws, which govern the distribution of assets when someone passes away without a valid will, vary depending on your state. New York State intestate laws are intricate and often difficult to understand. These laws may not align with your desired outcomes or yield ideal results for you and your family structure. To briefly outline basic New York intestate law:

If the deceased has a spouse, the spouse inherits everything
If they have a spouse and children, then the first $50,000 plus half of the balance goes to the spouse while the children inherit the remaining half of the balance
If children die prior to the deceased, then grandchildren step into the role and inherit instead of the children

It is important to note that while adopted children inherit assets like a biological child, foster children and stepchildren are only allowed to inherit if they are legally adopted. Non-marital children, or children born to an unmarried couple, will inherit from their mother automatically without any further requirements. However, non-marital children will only inherit from their father when paternity is established. Paternity can be established through legal acknowledgment by the father, court determination, or genetic testing. If a non-marital child dies, their spouse, mother, and maternal family are automatically entitled to their estate. The father and paternal family are also included, provided that paternity has been established. There are more layers to New York State intestate law, but in summary, it is very complex and does not often act in your favor if you have a non-traditional family structure.

In the event that a father figure dies prior to establishing legal paternity or an estate plan, a nonmarital child can still inherit wealth if they file a paternity petition with a family court and win their case. If it is possible to show DNA results, legal documents, or any other proof that would be accepted in a court of law, they can obtain a share of their father’s wealth. However, this is a lengthy process and it is often difficult to establish paternity after the father has passed, especially with no DNA test. After paternity has been established, the nonmarital child can assert their inheritance rights as a legal heir and file a petition with the probate court to make a claim against their parent’s estate. This process is filled with unpredictability and it can be months or even years before the case is resolved. As nonmarital parents, it is wise to consult with a knowledgeable estate planning attorney in order to explore your options to ensure that your child and assets are protected in the event of your passing.

Avoiding Probate

Creating an estate plan is a proactive and prudent step that can help you avoid the headache that comes with the probate process. By meticulously crafting an estate plan, you can ensure that your assets are distributed according to your wishes. Life flies by quickly, and you never know what might happen tomorrow, so it is never too early to make an initial plan. You must also acknowledge that estate planning is not a one-time endeavor. It is important to routinely update your estate plan when important milestones occur such as getting married, accumulating new wealth, and welcoming children. A well-thought-out and comprehensive estate plan goes beyond asset distribution, encompassing many different elements such as the establishment of trusts, designation of beneficiaries, appointment of guardians for minor children, and planning for tax implications. By considering all of these aspects, you will maximize your personal benefit and the benefit for your inheritors. This is especially important for parents of nonmarital children, specifically fathers, because New York Intestate law will not be on your side. By taking the time to create and regularly update your estate plan, you inevitably gain control over your financial legacy and ensure that your hard-earned assets fall into the desired hands.

Estate planning can be a daunting task, and most people do not want to engage in such a process because it forces them to face their mortality. However, no matter how old you are, if you have any assets that you see as valuable, it is essential that you set up an estate plan. Estate planning gives you autonomy over who your assets go to and it helps descendants avoid dealing with the taxing probate process after you pass. In non-traditional family situations, estate planning is essential because New York State intestate law does not often work in your favor. It is important to have an experienced attorney by your side throughout your estate planning journey to help maximize the benefits and minimize the long-term costs. If you have any further questions or are ready to begin your estate planning journey, please contact the Trust and Estate Planning Law Office at (718) 333–2395.

Traditional Vs Roth IRA- Which One is Easier to Inherit?

When it comes to planning and saving for your retirement, one of the first decisions you need to make is choosing which type of retirement account to open. There are numerous types of retirement accounts, each with their own unique advantages and disadvantages. Though it is beneficial to have so many options, it is important to learn about each of them to know which suits you best. However, it can get complicated, especially knowing that one day your children or grandchildren will inherit what you leave behind. This is where understanding the different tax rules in each account becomes significantly important. A good place to begin is looking at the two most popular retirement accounts: Traditional Vs Roth IRA.

What is a Traditional and Roth IRA?

A traditional and Roth IRA are both individual retirement accounts, with tax advantages. However, they differ in many ways and have their own types of advantages. This leaves it up to you to choose based on your preference. Below is a list of their main advantages and disadvantages to consider

Taxes

Traditional - The way a traditional IRA is set up is money that is invested in this account is tax-deducted. Meaning, the portion of your income that you contribute to this account, will not be taxed in your yearly income which gives you an immediate tax break. Thus, only withdrawals made from the account in the future will be taxed as income.

Roth - The way a Roth IRA is set up is money invested into the account are after-tax contributions. Meaning, money put into the account has already been taxed and can grow tax free. Thus, withdrawals made in the future will NOT be taxed. However, this will not give you immediate tax breaks on your current income.

Contributions

Traditional - With a traditional IRA you can contribute pre or post tax dollars. For 2022, the limit is $6,000, and for those 50 years and older, $7,000. In addition, there are no income limitations, anyone with earned income can contribute.

Roth - With a Roth IRA, there are some rules for contribution. Contribution limits are $6,000, and for those older than 50 years and older, $7,000. However, there are limitations based on your Modified Adjusted Gross Income, which in 2022 has changed to $129,000.

Withdrawals

Traditional - When it comes to the time of withdrawing money from your Traditional IRA, there are some restrictions. For one, all withdrawals you make after the age of 59 ½ are taxed as income. Additionally, you cannot keep your money in this account forever, by the age of 72 you are required to start making withdrawals.

Roth - When it comes to the time to withdraw money from your Roth IRA, that is when you see its advantages. For one, you will not have to pay tax on any withdrawals since contributions were already taxed before. Secondly, you can keep money in this account for as long as you want. However, if you do choose to withdraw, you can do it penalty and tax free after 5 years of opening the account and age 59 ½.

How These Differences Impacts Inheritance:

When deciding which account you want to pass on for your future family to inherit, most of the decision comes down to taxes and which would give the most benefit.

Roth - According to many financial advisors, a Roth IRA might be the most advantageous account to pass down for inheritances. This is mainly because all money in the account can be withdrawn with no additional fees or taxes. However, it is also important to consider your current tax rate versus your children's potential future tax bracket. If you believe they will have an equal or higher tax, then it would be most beneficial to set up a Roth IRA.

Traditional - Though there are some cons when inheriting a Traditional IRA such as having to pay taxes on withdrawals, there are some pros as well. For example, if at the time you are making contributions you have a high income and net-worth, you may be better off setting up a Traditional IRA since you may have a high tax rate. Therefore, when your children make withdrawals in the future they can liquidate and pay taxes at their own rate. This would essentially help you lose less money.

Reasonably, it could be difficult to predict the future as well as the tax bracket your children will be in. Therefore, it's important to remember if you choose to receive immediate tax advantages with a Traditional IRA, you can always convert it in the future to a Roth IRA. To help choose which retirement account is right for you and include it in your estate plan, contact the Law Office of Inna Fershteyn at (718) 333-2394.

Passing Assets to Grandchildren Through a Generation–Skipping Trust

While there are numerous ways in which one can pass assets to family members or following generations, a generation-skipping trust allows a beneficiary—or otherwise called a trustor or grantor—the ability to pass all assets onto the next generation by "skipping" the consecutive generation tax–free. This form of trust is most often utilized for relatives who are at least 37.5 years younger than you. They often include a beneficiary such as a friend, grand–child, or niece/nephew (excluding a spouse or ex-spouse).

What is a Generation-Skipping Trust?

A generation-skipping trust is an established trust that names a beneficiary who has to be at least 37.5 years younger than the settlor. A generation-skipping trust can be established by a settlor, as part of a complete estate plan to reduce tax obligation.

A settlor, for example, might leave an inheritance to a grandchild without ever transferring ownership of the assets to the child's parents. The assets flow tax–free to the recipient upon an individual’s death from the consecutive generation.

How a Generation-Skipping Trust Works

Generation-skipping trust laws provide precise requirements for who can be designated as the "skip person," according to the United States Code. According to these laws, the skip person, or beneficiary, must be “a natural person allocated to a generation 2 or more generations below the transferor's generation assignment.”

Three Things to Consider when Creating a Generation-Skipping Trust

First, the federal GST exemption level was raised to $11.4 million in 2019 and $11.58 million in 2020, after being adjusted for inflation. This implies that you are eligible for a lifelong generation-skipping tax exemption on property transfers up to that amount. There are twelve states who additionally have their own inheritance tax, which applies to smaller estates in some cases. When someone leaves an estate to their child, who then leaves the estate to their offspring, the estate taxes are levied twice. One of these transactions and estate tax assessments is avoided by using a generation-skipping trust.
As long as the original assets stay in the trust for the deceased person, there is no restriction prohibiting the following generation from obtaining earnings on assets. The trust can also be set up for them to obtain a voice in future beneficiaries' rights and interests. When your children pass away, the assets will transfer to the beneficiaries.
It is not necessary for the recipient to be blood related. A generation-skipping trust solely requires that the trust is created for a beneficiary who is at least 37 1/2 years younger than the deceased individual.

Generation-Skipping Trust and Taxes

“Congress created the generation-skipping transfer (GST) tax and connected all three taxes [estate, gift, and generation-skipping transfer taxes] into a single estate and gift tax,” according to the Tax Policy Center, with the objective of eliminating the estate tax loophole.

Accordingly, by moving assets to the trust that falls under the exemption amount, the trust can be established to take advantage of the GST tax exemption. If the assets appreciate in value, the proceeds can be distributed to the trust's beneficiaries. Furthermore, because the trust is unchangeable, your estate will be free from paying GST even if the value of the assets exceeds the exemption limit. This is also true for any asset appreciation because all profits are transferred directly to beneficiaries. This means you will not have to pay the generation-skipping transfer tax if the value of the trust's assets totals to an amount exceeding the exemption maximum.

The estate tax exemption was increased through 2026 by the Tax Cuts and Jobs Act, which was passed into law in 2017. Because of the large barrier, most people will not be subject to the generation-skipping transfer tax. However, beneficiaries who receive assets in excess of the $11.58 million inflation-indexed exemption would be subject to a 40% top tax rate on the taxable amount.

Gift Tax

The individual gift tax for 2019 was $11.4 million. As a result, you and your spouse will be able to exchange $11.4 million over the course of your lives. Through 2025, the yearly lifetime gift tax exemption has been raised by the Tax Cuts and Jobs Act of 2017. The gift tax increased to $11.58 million per person in 2020.

Determining Whether a Generation-Skipping Trust is Right For You

Since a generation-skipping trust is a complex legal structure, it is a good idea to think about it as soon as possible—preferably when you are starting to plan your retirement.

A generation-skipping trust is an excellent concept for capital preservation if you have a significant estate that is likely to be affected by the federal estate tax, and where, barring any catastrophic circumstances, your children will also have to pay the estate tax. It can also prove to be a sufficient resource in preserving your personal assets to those you wish to desire. Nonetheless, you must keep in mind that trusts are irreversible.

If you are in need of a highly qualified and experienced attorney for advice on how to build a trust, please contact the Law Office of Inna Fershteyn at (718) 333-2395 to have all of your authorization questions answered.