Trusts that can shape your family’s tomorrow

Legacy planning is about more than distributing assets; it is the careful design of a future that reflects a family’s vision, values and long‑term priorities. For wealthy families navigating concentrated assets, tax exposure and increasingly complex estate landscapes, trusts remain among the most versatile tools available.

“Trusts give families a way to shape the future with intention,” said Michael Sears, senior trust officer for BOK Financial^®. “They create structure, clarity and guardrails that protect both the plan and the people it’s meant to serve.”

Three core trust strategies can form the foundation of a modern legacy plan, according to Sears. They are:

• Transferring growth efficiently through a Grantor Retained Annuity Trust (GRAT)
• Creating tax‑efficient liquidity with an Irrevocable Life Insurance Trust (ILIT)
• Supporting long‑term compounding and control using an Intentionally Defective Grantor Trust (IDGT)

Each structure serves a distinct purpose, yet together they help families balance appreciation and liquidity, along with their unique vision and values.

Transferring growth with a GRAT

A GRAT is a widely used tool for shifting appreciation to the next generation at a low tax cost. “A GRAT can be a very precise instrument,” Sears explained. “It allows families to move future appreciation efficiently while keeping control and cash flow during the term. That balance is what makes it so attractive.”

With a GRAT, families transfer assets, often those with meaningful growth potential, into the trust while retaining an annuity for a set period. Whatever appreciation remains after that term passes to beneficiaries. GRATs work especially well for business interests, concentrated stock or other assets poised for significant future growth. 

Creating liquidity and clarity with an ILIT

Meanwhile, ILITs help solve one of the most persistent challenges in estate planning: generating liquidity exactly when it’s needed most. With an ILIT, the trust—not the individual—owns the policy, so the death benefit sits outside the taxable estate and can be used to cover estate taxes, support heirs or equalize inheritances, particularly where a closely held business is involved.

“The structure of an ILIT ensures that liquidity arrives when a family is most vulnerable,” Sears said. “It helps avoid forced decisions—like selling a business too quickly—and gives heirs room to carry out the plan thoughtfully.”

Supporting long‑term growth with an IDGT

Finally, an IDGT combines long‑term planning with ongoing involvement. By moving appreciating assets into the trust while continuing to pay the income taxes personally, families can accelerate growth for their beneficiaries and gradually reduce their taxable estate. It is especially effective for transferring interests in businesses or high‑growth assets.

As Sears explained, “An IDGT is a sophisticated solution, but the idea behind it is simple: let the growth occur where it benefits the next generation while maintaining strategic control today and being as income tax efficient as possible.”

The power of combining strategies

These three strategies rarely stand alone in a legacy plan. In many cases, all three are in place: a GRAT moves appreciation, an ILIT provides liquidity and an IDGT supports long‑term compounding, all working together to reinforce the structure of a family’s multigenerational legacy.

“When these tools are coordinated, they create a planning framework that maximizes growth outside of your estate that can benefit future generations,” Sears said. “It’s about building something that lasts—and lasts with intention.”