Inheritance Planning

Inheritance planning is about how, not just if.

Most people focus on who gets what. The bigger question is how. The same dollar inherited as a Roth IRA, a brokerage account, or a life insurance payout lands in your heir’s life very differently. So does the same dollar received outright at age 22 versus held in a trust with structured distributions.

At BRIA Capital Group, we work with your estate attorney to make sure the financial structure of your plan matches what you actually want to happen.

Strategies

There’s no single right approach. A good plan reflects the family, not a template.

• Outright vs. in trust. Outright is simple and fast. In trust adds protection from creditors, divorces, and decisions made at twenty-two that shouldn’t define a lifetime. Trusts can release money on a schedule, for specific purposes (education, home purchase), or at the trustee’s discretion.
• Generation-skipping considerations. Passing assets to grandchildren (directly or through trust) can be powerful for long-term family wealth, but the federal generation-skipping transfer (GST) tax has its own rules that need attention. With the 2026 federal exemption at $15 million per person under the OBBBA, most families have room to plan flexibly.
• Charitable strategies. Donor-advised funds, qualified charitable distributions from IRAs (for those over 70 1/2), and charitable remainder trusts each fit different situations. Charitable giving done well can support causes you care about and reduce the tax bite on what’s left.
• Equalizing among heirs. When one child is in the family business or owns the lake house, equal isn’t always equal. Life insurance is often used to balance the inheritance without forcing a sale.

The step-up in basis advantage

This is one of the most powerful, and most overlooked, rules in the tax code. When someone dies, most appreciated assets they own get a “stepped-up” cost basis to fair market value as of the date of death. The embedded capital gains essentially disappear.

A simple example. You bought a house thirty years ago for $50,000. It’s worth $400,000 today. If you sell it during your lifetime, you have potentially $350,000 of gain to deal with (less exclusions). If your heir inherits it instead, their cost basis resets to $400,000. If they sell shortly after for $400,000, there’s no capital gain.

The same idea applies to taxable brokerage accounts holding long-held stocks, mutual funds, or real estate. The 2026 stepped-up basis rules are unchanged. For families with appreciated assets, this often means it’s worth holding those assets, not selling them, late in life.

Roth IRAs and life insurance work differently (they’re already tax-advantaged), so the planning lens is different for each. That’s where having the conversation matters.

Roth IRAs as a generational wealth tool

A Roth IRA inherited by a non-spouse beneficiary is, in our view, one of the most under-appreciated inheritance vehicles available. Under the SECURE Act, most non-spouse beneficiaries must drain the inherited Roth within ten years of the original owner’s death. But during those ten years, the account continues growing tax-free, and withdrawals are tax-free.

A $250,000 Roth IRA growing at a reasonable rate over ten years can become a meaningful sum, all of it tax-free in your heir’s hands. Compared to a traditional IRA of the same size (which would be fully taxable to your heir at their marginal rate over the same ten-year window), the difference can be substantial.

This is why Roth conversions, done strategically in lower-income years, often have a generational payoff that goes well beyond the original owner.

Common pitfalls

• Beneficiary form mismatches. The will says one thing, the IRA says another. The IRA wins.
• No plan for digital assets. Online accounts, crypto, photos, even loyalty programs. Without access and authority, much of it is lost.
• Equal isn’t always fair. Splitting a business “equally” among kids who don’t all work in it usually ends badly.
• Forgetting about taxes on inherited traditional IRAs. The ten-year rule can push heirs into higher brackets during their peak earning years if the planning isn’t done up front.

Real example with numbers

Two siblings each inherit $500,000 from a parent.

• Sibling A inherits a traditional IRA. Under the SECURE Act 10-year rule, they have to drain it by year 10. They take the money in years 8 to 10, when they’re in peak earning years and a 32% federal bracket. Roughly $160,000 goes to federal income tax. Net to them, around $340,000.
• Sibling B inherits a Roth IRA of the same size. Same 10-year window, but every dollar comes out tax-free. They let it grow for the full ten years at a reasonable rate, then withdraw. Net to them, potentially well above $500,000, depending on returns.

Same parent, same headline inheritance, very different outcomes. That difference is usually decided years earlier, by how the parent positioned their accounts during their working and retirement years.

If you want to walk through what your inheritance plan actually looks like to your heirs after taxes and structure, we’ll sit down and run the numbers.