Great Wealth Transfer: 3 Ways To Prepare for This Financial Shift

Senior couple planning their investments with financial advisor in living room.
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One of the greatest wealth transfers is currently taking place throughout the United States. The New York Times reported baby boomers will be leaving money and assets like houses worth thousands, millions and, in some cases, billions of dollars to their heirs.

As this intergenerational transfer of wealth occurs over the course of the next decade, heirs and their baby boomer parents need to carefully prepare to avoid any wealth transfer mistakes or confusion. These are the key considerations necessary to prepare for this financial shift.

Have a Family Conversation Asking Important Questions

Uncomfortable as it may be to discuss death with family members, especially parents, this conversation is critical to prepare for the next steps in a wealth transfer. 

Rather than wait until the worst has happened, families should start having these important conversations now. If you aren’t used to talking about finances or values with your family, Stacy Coffey, CFP and SVP wealth strategies at Wealth Enhancement Group, recommends asking questions with positive intent such as:

  • What type of legacy do you hope to build and leave for the family?
  • How can we make sure the values of our family pass to the next generations and live long after we’re not here?
  • How do we work together to uphold commitments you’ve made, or want to make, to causes and people important to you?
Make Your Money Work Better for You

Baby boomer parents and heirs should ask questions, listen carefully and approach the conversation with curiosity. As family members start to become comfortable with the discussion, Coffey said this leads to aligning on needs to accomplish outlined goals. Some of these needs may include estate planning, reviewing beneficiaries and education planning.

I’m a Financial Advisor: These Are the Worst Money Mistakes I See People Make

Meet Face to Face With All Professional Advisors

It is all too common for an heir to be left without a plan or a will that clearly articulates the wishes of the deceased. Rather than misinterpreting these wishes, heirs and baby boomer parents should seek good communication and clarity to avoid wealth transfer mistakes.

Christopher Manske, founder and president of Manske Wealth Management, recommends taking a face-to-face meeting with all professional advisors involved in the process. This usually means visiting the estate attorney’s office so the entire family can learn about their vision, what is expected of them and shake hands with the financial advisor, CPA and attorney.

Prepare a Will

This is one of the simplest steps anyone can take if they are preparing to transfer wealth. According to Derek Jacques, attorney at The Mitten Law Firm, around 70% of adults do not have a will in place. 

Make Your Money Work Better for You

In the years to come, the lack of a will causes confusion and havoc for many families. Jacques recommends setting up a trust to handle all assets. Those setting up an estate plan or a will need to determine how it will be accessed and by whom. If you are unable to fully prepare a will, document where assets should be disbursed upon death.

Not sure what to do next, even if you know you need to prepare a will or estate plan? Coffey recommends taking a moment to pause and take care of yourself.

“Estate plans and probate aren’t executed overnight. You have some time,” said Coffey, adding that families who don’t already have a financial advisor in place may want to consider one.

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