A well-designed plan protects your wishes and helps avoid conflict among your heirs.
A wealth transfer plan guides the movement of your assets from your estate to your beneficiaries. Baby boomers are already in the throes of the most significant wealth transfer in history. Over the next 25 years, they are expected to leave $68 trillion in wealth to their heirs. But you don’t need to be older to need a wealth transfer plan, nor do you need a large estate.
A plan that includes a will and proper beneficiary designations helps anyone ensure that their wishes will be honored, and their assets will end up where they meant them to be. Barring a plan, assets can end up in probate court, which will decide what to do with them. This process can be slow and expensive. In addition to avoiding court, documenting intentions can help head off potential disagreements among heirs.
Here’s a look at the steps you should take to start your wealth transfer plan today.
Review your assets
Write a will
Check your beneficiaries
Choose someone to make decisions on your behalf
Understand estate taxes
Keep key people informed
Make sure anyone assigned a unique role in your estate is aware of their full responsibilities. You may also want to talk to your heirs about your wishes and how you arrived at your decisions. Making your plans known can head off potential conflicts among your heirs further down the road. Keep estate planning documents and other important financial information such as account passwords or property titles in a safe place, and let your heirs know how to find them.
The intersection of financial, legal, and family issues can make wealth transfer a complicated matter. But a well-crafted plan can help ensure the process goes smoothly. Enlist your financial and legal advisors’ help to build a sound plan that ensures your wishes will be honored.