Generational Wealth Transfer and Passing Along Your Assets

When it comes to wealth management and planning for the future, deciding how your assets will benefit the next generation is crucial. We all want to maximize growth and create a better tomorrow through generational wealth transfer. It can seem like a difficult task—but it doesn’t have to be.

Preparing for generational wealth transfer is important for everyone, regardless of your age or income level. Let’s explore how you can proactively plan for the future of your wealth, even after you’ve passed.

Why create a plan for passing down your assets?

There are a number of reasons why you should create a plan for your wealth and assets. They all fall under a few central benefits:

1. Ease during a difficult time. Dealing with someone else’s legal and financial situation when you’re already dealing with the stress of their poor health or loss is challenging. A well-structured asset and estate plan makes it easier for your loved ones during these tough moments.
2. Peace of mind. Creating a financial plan is rarely a “fun” activity, but having one in place gives you one less thing to worry about. You gain a better sense of control over how your assets will be distributed when you’re gone.
3. Minimize taxes. Maximize financial growth. By creating a plan, you’ll be able to get a more complete picture of where your assets stand and any taxes that need to be paid. A financial planner can also help guide you on efficiently managing assets to maximize what you pass on to your loved ones.

Plotting out a great wealth transfer plan will help you with budgeting, investing and saving in the most effective way possible.

Strategies for passing down your wealth

Ready to start generational wealth planning? Keep in mind that everyone’s financial situation is different, and speaking to a financial planning expert is important to help you make the right decisions.

1. Using trusts, financial accounts and estate planning tools

• Financial Accounts: Secure and grow your assets through various accounts.
• Revocable (Living) Trusts: These allow flexibility during your lifetime.
• Irrevocable Trusts: Provide long-term asset protection.

2. Working with a wealth management advisor

• Significant Generational Wealth: If you’re leaving behind substantial assets, seek professional guidance. 
• Legal Powers: Advisors help appoint individuals with legal authority over your assets. 
• Asset Safety and Growth: Experts ensure your assets are protected and continue to grow.

3. Taxability and legal considerations

• Federal Estate Tax: If your assets reach a certain value, this tax applies before distribution. 
• Powers of Attorney: Designate trusted individuals to act on your behalf. 
• Other Legal Roles: Cover all bases with professional assistance.

Essential documents and steps in wealth planning

There are to-do items that should be on everyone’s list when creating a wealth transfer strategy. Here are a few of the most important steps:

Create a will

A will is a legal document that outlines how your property and assets will be distributed after your passing. It is never too early to create a will, and you can even specify circumstances for changing beneficiary information if situations change. . It’s like leaving behind a roadmap for your loved ones.

Assign power of attorney

There are a few different powers of attorney (POA) you can assign, with property POA and healthcare POA being the most common. Essentially, these are individuals you choose to make decisions for you in case you are unable. Pick people you trust to have POA over your assets. Have conversations with them to make sure they are comfortable taking on that role before you assign them. If you plan to assign different POAs to different people, discuss that openly. It can help make things smoother if your POAs have a mutually respectful relationship and understand your choices.

Name beneficiaries for life insurance and bank accounts and review plans with them

Scenes in movies and television where a mysterious will is revealed can be fun to watch play out, but most people will want to clue in their beneficiaries—those receiving your assets—of their intent to help avoid confusion. If you have life insurance, like the Gerber Life Guaranteed Life plan, or personal bank accounts, it’s important to list who will claim those benefits when you’re gone. 

Life insurance is just one piece of the puzzle when you’re planning how to pass along your wealth and assets. Remember, it’s never too early to start planning for your loved ones’ financial future.