According to studies, 70% of a family’s wealth is lost by the end of the second generation, and 90% by the end of the third. To prevent becoming a statistic, you should educate and inform your extended family about your wealth transfer goals and the plan you’ve put in place to attain them.
Creating a Lasting Wealth Plan
You should consider communicating the following information to your family to ensure that your loved ones understand and will be prepared to carry out your wishes during a difficult time:
- Your goals and intentions for inheritances
- A broad overview of your wealth
- Your final wishes for burial, cremation, or memorial services
- Who you want to make decisions for you if you become unable to make them!Location of important documents: this should include how to access your digital assets such as social media, online bank accounts, and crypto assets
- Your key advisors and their contact information: estate planning attorney, financial advisor, certified public accountant, insurance agent, spiritual advisor, etc.
- Estate planning documents that you have created and the purpose each document serves:
- Power of attorney: specifies who is responsible for managing your accounts and property if you are alive but unable to do so
- Medical power of attorney: names of individuals who can make medical decisions on your behalf if you are unable to make them yourself
- Advance directive or living will: clarifies your wishes regarding life-sustaining procedures
- Revocable living trusts: avoid guardianship or conservatorship of your property while you live and avoid probate upon death
- Health Insurance Portability and Accountability Act (HIPAA) authorization form: names the person you wish to have access to your protected health information
- Pour-over will or last will and testament: a catch-all for money and property not transferred into your revocable living trust or by beneficiary designation before death
- Irrevocable life insurance trust: removes life insurance from your taxable estate; provides immediate access to cash for loved ones’ needs, administration costs, and taxes
- Other advanced estate planning tools: protect money and property from creditors, predators, outside influences, and ex-spouses; enable charitable giving; minimize taxes; create dynasty trusts
Conclusion
We can assist you with determining your wealth transfer goals, creating a plan to achieve these goals, and effectively communicating this information to your loved ones.