Family Wealth Advisory for Young Families: What It Covers

By Kevin Luu, Co-Founder and Chief Learning Officer. Reviewed on 2026-09-30.

Family wealth advisory is advice that covers the whole household, not just the investment account: taxes, equity compensation, retirement plans, insurance, estate documents, and how the next generation learns to handle money. A family wealth advisor keeps all of those decisions in one plan and makes sure the CPA, the estate attorney and the investment accounts work from the same facts. For a two-earner W-2 family in California or Washington earning $750,000 to $3 million, most of the value sits in tax and equity-comp coordination, estate and guardianship documents, and writing down how the parents decide.

This page explains what that work looks like in a real year, how it differs from investment management or private wealth advisory, how to check an advisor before you hire one, and what to document for your children.

Family wealth advisory vs. investment management vs. private wealth

The labels overlap, so it helps to sort them by what the advisor is actually responsible for.

“Private wealth advisory for young families” is mostly the same idea sold through a bank or brokerage. The question to ask is the same either way: who is responsible for making the pieces fit, and how are they paid? For a longer comparison of family office models, see what a family officer does.

What a family wealth advisor does in a year for a W-2 household

For this reader, the work is concrete and calendar-driven. A typical year covers:

• Equity compensation. RSU vests, ESPP purchases, ISO exercises, and how much of the family’s net worth sits in one employer’s stock.
• Tax projection and withholding. RSUs are withheld at a flat supplemental rate that is often far below the family’s real marginal rate. Someone has to measure the gap before April, not after.
• Workplace benefits. 401(k) deferrals, after-tax “mega backdoor Roth” room if the plan allows it, the dependent care FSA, HSA eligibility, deferred compensation elections.
• Education funding. 529 plans, custodial accounts, and the kiddie tax.
• Estate and guardianship. Wills that name guardians for minor children, a revocable trust, beneficiary designations, trusts for minors, and enough life and disability insurance.
• The next generation. A plan for how the children learn the family’s thinking about money, work and giving. This is the part most families never get to.

A worked example: one household, two states

Assumptions (hypothetical): married couple filing jointly, two children ages 4 and 7. Spouse A earns $600,000 in W-2 wages, including $300,000 of RSUs that vest during 2026. Spouse B earns $300,000. Total wages $900,000, and we ignore pre-tax 401(k) and benefit deductions so the arithmetic stays visible. For simplicity we use the 2026 federal standard deduction of $32,200, so federal taxable income is $867,800. A real household at this level may itemize; the shape of the answer does not change.

The RSU withholding gap, federal only

For 2026, the 37% bracket for joint filers starts at $768,700 of taxable income, and the 35% bracket starts at $512,450 (IRS Rev. Proc. 2025-32). Treating the $300,000 of RSU income as the top layer of income:

• $99,100 falls in the 37% bracket: $36,667 of tax.
• $200,900 falls in the 35% bracket: $70,315 of tax.
• Federal tax on the RSUs: about $106,982.
• Withheld at the 22% optional flat supplemental rate (IRS Publication 15): $66,000.
• Federal gap: about $40,982, owed with the return or through estimated payments.

The Additional Medicare Tax adds a smaller gap. For 2026, joint filers owe 0.9% on combined wages over $250,000, which is $5,850 here. Each employer withholds only on wages it pays above $200,000: $3,600 for Spouse A and $900 for Spouse B, so $4,500 in total. The remaining $1,350 is also due at filing (IRS Additional Medicare Tax Q&A).

If the family lives in California

California taxes those RSU dollars as ordinary income. On the 2025 schedule, the latest the FTB has published, the RSU dollars at this income fall mostly in the 9.3% and 10.3% brackets for joint filers; the 10.3% bracket runs from $742,958 to $891,542 of taxable income, and 11.3% applies above that (FTB 2025 rate schedules). California SDI also takes 1.3% of all wages for 2026 with no cap (EDD): $11,700 on $900,000. If the family later sells RSU shares at a gain, California has no lower rate for long-term capital gains.

If the family lives in Washington

Washington has no individual income tax for 2026 (WA DOR), so the state layer on wages is mostly the WA Cares premium of 0.58% with no wage cap: $5,220 on $900,000 (WA Cares Fund). Two things change the picture. Washington taxes long-term capital gains at 7% above a standard deduction of $278,000 (2025, the latest published) and 9.9% above $1 million of taxable gains, which matters when the family sells a large block of employer stock (WA DOR capital gains tax). And the Legislature enacted a 9.9% income tax on AGI over $1,000,000 starting January 1, 2028. A family whose income is rising toward $1 million should plan for that now.

What the advisor would set up for this family

• A quarterly estimated payment, or a higher W-4 withholding for Spouse B, to cover the roughly $42,000 federal shortfall.
• A written rule for selling vested RSU shares, so concentration does not build up by default.
• Full 401(k) deferrals of $24,500 each for 2026, and a check of each plan’s after-tax option. The total annual additions limit is $72,000 for 2026 (IRS Notice 2025-67). With a $10,000 employer match, that leaves up to $37,500 of after-tax room per spouse, but only if the plan accepts after-tax contributions; turning it into Roth money also requires an in-plan Roth conversion or in-service withdrawal option.
• The dependent care FSA at $7,500 per household for 2026, if the employer has adopted the higher limit.
• A decision on 529 funding. Each parent can front-load up to $95,000 per child for 2026 using the five-year gift election, or $190,000 per child as a couple, if they make no other gifts to that child over the five years and report the election on Form 709 (Form 709 instructions). California gives no state deduction for 529 contributions.
• Updated wills with guardian nominations, beneficiary designations that match the estate plan, and a trust so the children do not receive assets outright at 18 or 21.

Estate planning looks different in California and Washington

The federal estate and gift tax exclusion is $15,000,000 per person for 2026, made permanent by the 2025 tax law and indexed from 2027 (IRS). Most families in this income range are below that line, so federal estate tax is unlikely to apply under current law. Washington is different: its estate tax exclusion is $3,000,000 for deaths from July 1 to December 31, 2026 (WA DOR estate tax tables). A Seattle-area home, two 401(k)s and a block of employer stock can pass that line well before the parents feel wealthy. In California, the more common practical problem is probate, which is slow and public, which is why a funded revocable trust is standard for California families with children.

For both states, the most urgent document for parents of young children is usually not a tax document. It is the guardian nomination and the trust that holds assets for a minor. Our estate planning work starts there.

How to check a family wealth advisor before you hire one

You can verify most of what matters in about 30 minutes.

1. Look the firm up on the SEC’s adviser database. Registered investment advisers file Form ADV, and you can read it on Investment Adviser Public Disclosure. Part 2A, the brochure, explains services, fees and conflicts in plain language.
2. Read the relationship summary (Form CRS). It states how the firm is paid, its conflicts of interest, and the standard of conduct it owes you (Investor.gov).
3. Ask how they are paid. Fee-only advisors are paid only by the families they serve. Commission-based or “fee-based” advisors may also earn money from products they recommend. Neither is illegal, but you should know which one you are hiring.
4. Ask who does the tax work. If the advisor will not look at your return or your RSU schedule, it is investment management with a different name.
5. Ask what they do for your children. Many firms say “next generation” and mean a meeting when the kids turn 25. Ask what happens when they are 6.

For a step-by-step version, see how to choose a family advisor.

Common mistakes families make with advisors

• Hiring for the portfolio, not the plan. At $900,000 of W-2 income, the RSU withholding gap and the estate documents usually matter more in a given year than fund selection.
• Letting employer stock pile up. Vesting is automatic. Selling is a decision, and nobody makes it unless it is written down.
• Splitting the work across people who never talk. The CPA sees last year, the attorney sees the documents, the advisor sees the accounts. Someone has to own the whole picture.
• Leaving the children out until they are adults. By then, the habits are formed.

What to document for your children

Advice ends with a decision. What usually gets lost is why the family made it. Why you sold the RSUs instead of holding them, why you chose a public school and funded the 529, why you give to the causes you give to. Your children see the outcome but not the reasoning.

As Kevin Luu puts it: “Your kids don’t need to inherit your portfolio. They need to inherit your decision-making process.”

One page per major decision is enough: the choice, the options you rejected, and the reason. Over ten years that becomes a record your children can read when they face the same choices. That is the idea behind a FamilyKnowledge® Library, and the reason we start with families while the children are young. If you want to see how much is currently undocumented in your family, read what documentation debt is.

Frequently asked questions

What is the difference between a family wealth advisor and a financial planner?

A financial planner may build a plan once and hand it over. A family wealth advisor typically stays responsible for carrying it out year after year across tax, equity compensation, estate documents and investments, and includes the children in the scope. The titles are not regulated terms, so read the firm’s Form ADV brochure to see what it actually commits to.

Do we need a family wealth advisor if we already have a CPA?

A CPA prepares the return and answers tax questions, usually looking backward. The advisor projects forward: how much to withhold on the next RSU vest, when to sell, how to fund the 529, whether the estate plan still matches the accounts. The two roles work best together, with the advisor sharing the projection with the CPA before year end.

When should young families start with a family wealth advisor?

The usual trigger is complexity rather than age: RSUs or ISOs, two high incomes, a first child, or a move between California and Washington. Starting while the children are under 12 also gives time to build the next-generation part of the plan before money habits are set.

Next step

Pull your 2026 RSU vest schedule and your last pay stub, and estimate your own withholding gap using the brackets above. If the number surprises you, or you have no written plan for your children, our family governance and tax management services are where Age Five Family Office™ work begins, and a Tax & Wealth Assessment is the simplest way to see where your household stands.

This article is general education, not individual tax, legal or investment advice. The right move depends on your family’s full picture.

Written by

Kevin Luu

Co-Founder and Chief Learning Officer, Bright Advisers

Kevin has advised high-income W-2 tech and biotech families since 2015, and leads the education-first Age Five Family Office from Brea, California.

Connect on LinkedIn →  · About Kevin