Key Takeaways

• • • The Great Wealth Transfer from Baby Boomers to future generations begins now.
    • Understanding your values and priorities helps you set goals for your family.
    • A trusted professional can help build and implement your plan.
    • Planning and communication can help you and your family make the most of your assets.

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    The Great Wealth Transfer that we’ve anticipated for decades is upon us. A 2021 report anticipates that aging Baby Boomers will leave about $72 trillion to their heirs, and about $12 trillion to charities over the next 20 years.¹

    Generational wealth involves passing assets from one generation to the next, which can include funding education, buying a home, or maintaining charitable contributions. Effective planning is crucial whether you’re building wealth or managing inherited assets, as it helps you achieve your goals.

    So, how can you make transferring wealth easier for your family?

    Clarify Your Goals

    • Assess Assets: Understand current and potential future assets, including investments, property, businesses, and heirlooms.
    • Define Objectives: Decide if you want to:
      • Support family financially
      • Donate to charities
      • Sustain a family business
      • Preserve family traditions, like maintaining a family cottage

    Call in the Professionals

    Whether your legacy goals are simple or complex, you’ll need professional help to implement your strategy and provide ongoing management.

    • Start with a wealth advisor, who can recommend an investment strategy that supports your goals and assist with budgeting and debt management.
    • An estate plan is needed for asset distribution, care in case of incapacitation and other important details. Estate planners may recommend trusts to protect your family’s legacy.
    • Good tax planning is also important to manage tax implications effectively.
    • Remember to make your plan flexible so it can adapt to changes over time.

    Giving While Living

    Transferring wealth usually includes cash, investments and real estate distributed according to a will. However, many people now choose to give while alive, including funding college, weddings or other large expenses.

    Another growing trend is multi-generational travel to bond and create memories. A 2023 survey found 50% of parents and grandparents took such trips in the past three years, with 54% planned by the older generation.² 

    Let’s Talk About Talk

    Talking about inheritance can be difficult. Many people find it hard to discuss money, whether they’re giving it away or receiving it. While it might feel uncomfortable, being open about your plans is important. It helps your family understand your wishes and ensures your plan can be carried out smoothly. Regularly review and update your plan to avoid misunderstandings and keep things on track.

    Encourage Financial Literacy

    To make the most of your legacy, your family needs to understand finances. They should know how your wealth was built, how to handle it responsibly and sustain it for future generations. A financial advisor can help with explaining the ins and outs of managing finances.

    Sooner is Better

    Creating a legacy for future generations can be a meaningful way to conclude a life well lived. Experienced professionals like Lake City Bank’s Wealth Advisory Group can help you plan, protect and execute your family’s wealth transfer.

     

    ¹ https://www.cerulli.com/press-releases/cerulli-anticipates-84-trillion-in-wealth-transfers-through-2045

    ² https://familytravel.org/wp-content/uploads/2023/10/FTA-Survey2023-Report.pdf

    Investment products used by the Wealth Advisory Group are not obligations of nor guaranteed by Lake City Bank, are not FDIC insured and may involve risk, including possible loss of principal.