Stipulate how you want your wealth to be transferred to your heirs.
Over the next 30 to 40 years, baby boomers are expected to transfer $30 trillion to their heirs, according to Accenture Consulting. To ensure a smooth wealth transfer and secure your family legacy, it's essential that you create an estate plan and keep it up to date. That might include working with a lawyer and/or a financial advisor to execute a will or create a trust and other needed documents.
It's also important to discuss your plans with your children and heirs. Steven J. Baum, Senior Vice President & Wealth Advisor for Regions Private Wealth Management in Tampa, Fla., offers these 10 tips and topics to cover with them.
- Set up a meeting with your financial advisor and adult children. Your financial advisor can help take the emotional side out of the conversation on how a wealth transfer will proceed. Discuss the value of a corporate trustee to help maintain family peace and avoid unnecessary issues.
- Explain your preferences on how your wealth will be used. Plan for when you are gone as if you were still living.
- Set parameters about how and to whom your money will be distributed. Are there any requirements for your heirs to receive the money?
- Talk about changes in family dynamics— such as divorces, multiple marriages, and blended families — and how those would impact your wealth transfer.
- Discuss philanthropy. Do you have any charitable causes that you want to support in the future?
- Set education expectations for future heirs. Do they involve undergraduate and postgraduate studies? What is expected of grandchildren and great-grandchildren?
- Discuss family legacy and what that might mean for your children, especially if it involves a family business or your community activities, boards, and charities that your heirs can continue to honor with their involvement.
- If you are a business owner, consider engaging a corporate trustee who can help eliminate any succession issues in the future.
- Make sure you are honest. Your children need to know where you stand.
- Schedule time to review. Review these items every three to five years or when a major life event occurs in the family such as a marriage, birth, divorce, or death.
Learn more about sharing your values and financial wisdom with your heirs.
