How Merrill Advisors Help Rich Families With Wealth Transfer

"This rate is lower than if [the next gen] goes to the bank and gets a mortgage," Valerie Galinskaya, managing director and head of the Merrill Center for Family Wealth, tells ThinkAdvisor in an interview. "It provides the wealth creator with a legitimate way to loan some of the money and the rising generation gets access to [some assets]."

The Merrill Center has 370 UHNW clients served by the firm's private banking unit that navigates issues of wealth transfer largely by facilitating family meetings, of which the advisor's input is a critical component, she said.

"We're fans of creating guidelines," Galinskaya said.

More than half of the $124 trillion expected to be passed on in America's "Great Wealth Transfer" through 2048 is expected to come from HNW and UHNW households, according to a Cerulli Associates report. And $54 trillion is projected to be passed to spouses before transferring family wealth to heirs and charities.

Galinskaya, a ThinkAdvisor Luminaries 2025 award winner for Thought Leader of the Year among broker-dealers with more than 1,000 advisors, explains why horizontal, or intra-generational transfers, are, for advisors, "a real opportunity to engage couples."

Here are highlights of our conversation:

THINKADVISOR: The Merrill Center for Family Wealth works directly with advisors' clients. What role do the advisors have in this scenario?

VALERIE GALINSKAYA: We establish a relationship with the client as an extension of the advisor team, working hand-in-hand with the advisors. We focus very heavily on them.

They're directly involved in all our client discussions and family meetings since they connect with the planning that the family is doing.

We do a lot of coaching and training with advisors to help them understand what we're seeing in family trends.

And we share our research with them so they can use it in serving existing clients and for prospecting.

THINKADVISOR: Please elaborate on how advisors help during the family meetings that you facilitate.

GALINSKAYA: It's very important for the advisor to be at the meetings, not just from a relationship standpoint but because of [the specific financial planning information] they'll share.

The rising gen has a lot of questions around estate planning topics and want to understand more about investing. It's important for the advisory team to be there to [discuss] the overall plan. This also helps [advisors] develop a relationship with the client, and they get to know the other family members too.

THINKADVISOR: Any pitfalls in transferring family wealth that advisors should be aware of?

GALINSKAYA: A major one is lack of or limited communication in the family. At a meeting, if a member is, say, expecting to get funds to purchase a first-time home or start a business and that isn't in the plan, you can see that the meeting can go south very quickly.

The other big pitfall is that sometimes there isn't a focus on skill-building for the next generation: learning to invest, budgeting, working with advisors, giving charitably.

Consequently, it's very hard for someone to wake up one day and suddenly do that effectively. So it's important not to defer skill-building, not just for the rising generation but for the whole family.

THINKADVISOR: Is it practical for the wealth creator to transfer some family assets while they're alive?

GALINSKAYA: It depends on the family's values and goals. We see a good number of families at least starting that process during their lifetime.

Longevity has become a complicating factor in wealth transfer, whether it's providing access to distribution from a trust, giving an intra-family loan or supporting education.

THINKADVISOR: Please talk more about family loans.

GALINSKAYA: I see a fair amount of these loans happening. For example, parents of a rising gen [adult child] may say, "We're not going to fund your first-time home — we want you to have some skin in the game. But we'll provide access to a loan at [a lower interest rate]."

Working with their advisor and tax counsel, they can implement that using applicable federal rates the IRS provides and that family members can use to borrow. This rate is lower than if they go to a bank and get a mortgage.

THINKADVISOR: Sounds very businesslike even though the loan would be for their own child. Thoughts?

GALINSKAYA: It's businesslike and clear. We're fans of creating guidelines. The loan provides the wealth creator with a legitimate way to loan some of the money, and the rising generation gets access to [some assets].

THINKADVISOR: Anything about the "Great Wealth Transfer" that hasn't been talked about much?

GALINSKAYA: Yes. A great deal of money is being passed down to the rising generation, but a lot of it also is horizontal transfers [intra-generationally] to a spouse or partner. We see a good share of [the latter]. It's a real opportunity [for advisors] to engage couples.

The importance of the horizontal transfer isn't highlighted enough.

THINKADVISOR: What does it involve exactly?

GALINSKAYA: A lot of trusts are structured so that if one spouse passes, at least some of the assets will go to a spouse and then pass intergenerationally.

A [Dec. 5, 2024] Cerulli [Associates] report says that "nearly $40 trillion of spousal transfers is expected to go to widowed women in the baby boomer and older generations."

There is, rightfully, a [big] focus on transferring to the rising generation. But there's also a tremendous amount that's going to be passed to a spouse or partner.

THINKADVISOR: Have you seen much arguing about inheritances at family meetings?

GALINSKAYA: Oftentimes it's very complex. Part of our role is to [regulate] that. Sometimes there are disagreements, a measure of conflict.

We see that as an opportunity to help families understand what success means to each member.

A source of tension can be you're coming to a family meeting thinking that a decision will be made about philanthropy and assume that each member has an equal vote, but [that isn't the case]. Different expectations can sometimes create a conflict.

I'm a big proponent of ground rules for a family meeting, especially if the members haven't had structured conversations about money in the past.

Our goal is to help families have productive conversations.