What to know about Wealth Transfer? 

A huge generational transition of capital is on the horizon as the country’s biggest population enters retirement. For the next two to three decades, estimates of how much money will be passed from baby boomers to younger generations range from $30 trillion to $70 trillion.  

In the United States, a projected $30 trillion in income will be transferred from Baby Boomers to their successors over the next three to four decades. According to a recent RBC Wealth Transfer Report, inheritors must schedule ahead of time when sharing money, whether on a small or large scale, but they may not be completely prepared.

However, money is a subject that many families are hesitant to discuss. Another is death. When these factors are combined, avoidance is a natural reaction. Even so, discussing wealth protection and succession arrangements with family members will help you prevent unpleasant surprises and undue tension after you or your partner pass away. In addition, talking about money and ideals, particularly in light of the current COVID pandemic, will help reinforce family relations and build a common interest. At the same time, you’re still alive and willing to reap the benefits.

According to some studies, only 35% of inheritors are prepared to inherit money from their benefactors. However, the study also discovered a connection between preparedness and wealth preservation trust. Those with a complete transition strategy in place were almost twice as likely to show trust in the next generation’s ability to maintain their resources among benefactors expecting to move on money.

Steps to follow in a wealth transfer process

Be sure your financial plan includes planned health insurance costs, taxes, and all other living expenses for the remainder of your life before you begin the process of giving away money, also known as “income transfer.” 

Create your family vision 

To begin, make a family tree. The role of an estate planning attorney in the assessment of asset transfer goals and plans would be beneficial. Your counsel will need to meet all of the players in your family—or families—and how they could factor into your intentions to better consider all of the possibilities for building your particular strategy. Consider who and where you choose to receive a part of your asset. Set objectives including wealth transfer, philanthropy, living expenses, education, incapacitation. Talking to your family about incapacity preparation is essential. The time is now, as the COVID pandemic is still ongoing. 

Make a list of your properties and liabilities.

Be diligent when preparing for the family’s financial future. To begin, make a personal balance sheet. Please make a list of all your possessions, including their position and value: Bank deposits, share shares, and other investments not held in a financial account, real estate, corporate holdings, safe-deposit boxes, tangible personal property, life premiums, mortgages, and other assets are also examples of assets. Next, list all of your debts, including mortgages, secured loans, auto loans, and unsecured loans. Finally, include all mutual and guaranteed liabilities, such as a school loan or a mortgage for a child or grandchild.

Concentrate on your legal documents 

Get copies of beneficiary designations to begin. Then, find more about the two most common documents in an estate plan. 

  • A will: A will is a written document that expresses your desires for the disposition of your assets and the custody of any minor children after your death.
  • A trust: A trust is a more complicated legal arrangement that includes guidelines for how and where funds can be distributed to trust beneficiaries. Trusts are a mechanism that can help you decide where and how your properties are allocated.

Finally, families should have open and frank discussions about the amount of wealth that can be passed and the most effective ways to do so. Boomers can also have a will, power of attorney, and health-care directives in writing, as well as amend their estate plans every three or five years to ensure all properties are appropriately titled.  

If conditions change, revise the schedule. It would help if you had the estate planning records checked every 3 to 5 years as a general rule. In addition, significant life events such as marriage, the birth of a child, divorce, the receiving of an inheritance, or death should prompt you to revisit your schedule.

If you or a family member of yours is looking for an experienced advisor in wealth transfer, feel free to reach out to us. Our team has the experience you need to support you during the whole process. 


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