Skip to main content

Key Considerations for Your Wealth Transfer Plan

A wealth transfer plan requires thoughtful planning and consideration and can help you prepare your heirs for the future.

Preparing Your Assets – and Your Heirs – for the Future

There is a “great wealth transfer” on the horizon, and you and your family may be part of it. Baby Boomers are set to pass on more than 68 trillion to their heirs, and careful planning and preparation – including having a wealth transfer plan in place – may be an important step for many families. While you’ll likely want to work with a financial advisor to craft a wealth transfer plan that is ideal for your unique circumstances and goals, the considerations below can help you begin thinking critically about the wealth transfer process.

First: Why You Make A Wealth Transfer Plan

You might catch yourself thinking, “My family knows and understands what I want to happen with my assets.” While this may be true to some extent, transferring wealth from one generation to another can be a complex process that requires careful planning and preparation. This is the case whether you inherited wealth, managed it wisely, and wish to pass it to your heirs, or if you have built first-generation wealth and hope to benefit future generations through your hard work. Regardless, you won’t want to leave anything to chance. A wealth transfer plan can be a valuable tool if you are looking to pass on assets to your children, grandchildren, or other loved ones, and it’s important to consider the various options available to you to help make sure your wishes are met.

Consideration #1: Use the Right Estate Planning Tools

It’s important to remember that your good intentions may not amount to much after you pass if you haven’t taken the time to put them in writing. You need a wealth transfer plan that utilizes savvy legal instruments to accomplish your goal of having your assets distributed according to your wishes. Using the right tools can also be a smart way to minimize tax implications for your heirs. Depending on your circumstances, there may be various estate planning tools and strategies that can help you achieve these goals. For example, trusts can be a useful way to transfer assets to future generations while also minimizing estate taxes. Since there are various types and structures of trusts, speak with an estate planning attorney or financial advisor to discover which makes the most sense for you and your wealth transfer plan.

Consideration #2: Prepare Your Heirs

A wealth transfer plan is certainly about the legal and financial mechanisms you’ll use to pass wealth to future generations, but it can be more than that, too. Another important consideration for your wealth transfer is how to prepare your heirs to manage and grow the assets they inherit. This may involve two types of ongoing discussions:

  • Financial Literacy. Education and training in financial matters will be foundational as you prepare your heirs for the responsibility of managing inherited assets. Keep in mind that most of us don’t learn much about personal finance in school, so you don’t want to assume that your heirs are financially knowledgeable. Your financial advisor may be able to recommend helpful resources for you to share, but the U.S. Treasury Department also offers a wealth of information at gov.
  • Financial Values and Principles. It may be financial literacy that underpins much of your heirs’ wealth management decision-making, but your family’s values and principles also play a role in guiding their decisions and actions. If you have lived frugally, for example, in order to be able to support charitable organizations and assist your family members financially, it’s important to share these values with your loved ones. By sharing the motivations that guide you and leading by example, you can feel more confident that your legacy will continue for generations to come.

Consideration #3: Navigate the Emotional Aspects Together

In addition to the practical considerations mentioned above for your wealth transfer plan, it’s important to recognize that a wealth transfer also involves emotional and psychological aspects. Many of the conversations you’ll need to have will revolve around your own mortality, and that can be difficult to discuss with your loved ones. Some may be more willing than others to engage in conversations about the future, so tread gently with those for whom these topics are quite emotional. It may be helpful to work with a financial advisor who is sensitive to the emotional side of wealth transfer planning and can help you create a plan that reflects your unique priorities and goals while being respectful about approaching difficult topics.

Are You Ready to Create a Wealth Transfer Plan?

There are many practical benefits to having a wealth transfer plan in place and getting there can be a complex and multifaceted process. By working with a financial advisor, estate attorney, or other financial professionals well-versed in wealth transfer planning, you can gain the insights and guidance you need to create a plan that achieves your goals and sets your heirs up for success. With the right approach, your legacy can live on, and your assets can continue to benefit your family for generations to come.

At Paces Ferry, our client’s needs are at the center of everything we do. If you’d like to discuss a wealth transfer plan, or any other wealth management needs, contact us today. We look forward to hearing from you!

Paces Ferry Wealth Advisors, LLC is a registered investment advisor with the U.S. Securities and Exchange Commission (“SEC”).  This material is intended for informational purposes only. It should not be construed as legal or tax advice and is not intended to replace the advice of a qualified attorney or tax advisor.

Zachary Morris

Zachary Morris, CFP®

Having traveled to over 35 countries, Zach is a believer in Ralph Waldo Emerson’s statement that Life is about the journey, not the destination. Being a CERTIFIED FINANCIAL PLANNER™ provides Zach the opportunity to help clients define and realize their journey, and co-founding Paces Ferry Wealth Advisors, an independent firm, allows the freedom to define the client experience along the way.