Are You Prepared for the Great Wealth Transfer?

Between now and 2045, roughly $84 trillion will be passed between generations, largely through estate plans. This has been branded the Great Wealth Transfer, and the process has already started. Many members of the Millennial and Gen X generations are receiving these assets from their parents and grandparents.

$84 trillion is a staggering amount of money, and it shows that this financial process is going to be complicated. There are many different things to consider at this time.

Do you want to give gifts in advance?

One way to prepare is by reducing the value of your estate now. This can sometimes have benefits from a tax perspective, depending on the value of your estate. It can also streamline the process because you can talk with beneficiaries about how you want to transfer your assets while you’re still alive.

Putting assets in a will

Similarly, it helps to draft an estate plan so that you can use a will to split up the remaining assets between beneficiaries when you pass away. Estate disputes are common for those who die intestate—without a will—so it’s beneficial to your family if you have this plan in place in advance.

Utilizing trusts and other accounts

Finally, you may want to think about putting some of your assets into trusts. Trusts can hold assets for a minor who may not be old enough to inherit directly. A trust can also be used to specify how those funds should be used, such as setting up a trust to pay for a beneficiary’s college education.

These are just a few things to consider as you work on creating your estate plan and considering your role in the great wealth transfer. Be sure you know what legal options you have. Contact us online or call today for a free consultation with Pennington Law, PLLC.