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Protect Your Legacy: Planning for Wealth Transfer

The unpredictability of the world is evident now more than ever. As the greatest generation was more severely impacted by the recent global pandemic, the Great Wealth Transfer has begun to accelerate through the Baby Boomers. Given the fact that trillions (yes, with a T) of dollars of wealth are set to transfer to downstream generations in the next few decades, our industry has a lot of work to do.

While the topic can be difficult to think or talk about, it’s never too early to talk to your clients about wealth transfer. Most people will avoid talking about death if given the option, combine that with discussions around which family members will get what and it is understandable why people put off such conversations. However, knowing what will happen to assets if your client were to pass is of critical importance for everyone involved.


Conversation Starters

If you’re having trouble starting this discussion with clients, it helps to remind them that nothing is permanent until they pass. Estate plans can be changed and should, in fact, be regularly reviewed. What a client chooses as an estate plan now, doesn’t mean that’s what it has to be for the rest of their life.  It’s a great potential moment to bring in an estate planning attorney that you trust if you aren’t equipped to talk through the details.

You should take the time to make clear why wealth transfer mechanisms are important. They’re very clearly not about benefiting the owner, but rather saving frustration, larger than necessary tax bills, legal fees, and conflict from becoming problems for the recipients. Generally, the last thing someone wants is their death to cause family issues. Proper planning can avoid this and make things run smoothly.


Other Considerations

You’ll want to walk your clients through every aspect of their financial life. Debt generally has to be paid back in the event of death, so recipients of an estate plan should have an accurate idea of how much they will be receiving and not be saddled with surprise reprisals from banks or other creditors. 

There is a whole gamut of paperwork that should be lined up to ensure wealth transfers are executed properly. 

Finally, stress that if a plan isn’t made, the money could be seized by the state and no matter where you fall on the political spectrum most of us agree that the government is easily the least qualified organization to be redistributing those assets. Making a plan ahead of time benefits everyone and is the right thing to do to protect your legacy. 

If you have a client that’s dragging their feet on making an estate plan or designating parts of their wealth transfer, now is as good of a time as any to push them to do so. Using your preexisting financial planning software can be an easy way into other financial discussions you have with your clients. And while it’s easy to put off these kinds of conversations, being introduced to those who may be managing your clients wealth helps you create goodwill and opportunities that wouldn’t otherwise exist. 

Nurturing cross generational relationships can be hard to manage, but are usually worth the effort. How are you opening and maintaining conversations cross generationally now?