Did you know that, over the next two decades, about $68 trillion is going to change hands? That’s one of the most recent estimates for how much money Baby Boomers are going to leave to their children. It’s a staggering amount of money and has been deemed the biggest wealth transfer to ever take place under the current system.
Clearly, no one person is going to hold the bulk of this money, but everyone is involved to one degree or another. If you’re passing $1 million to your heirs, you’re part of it — just as you are with $10 million, $20 million or more. The change to society is going to be absolutely massive, and everyone with assets to add to this transfer needs to be ready.
Who will get your assets?
First off, you want to consider who actually gets what you own. The natural choice is to leave assets to your children, but you don’t have to. You can leave money to charity, for example, or pick other beneficiaries that are not in your family. If you have some natural heirs you want to leave your assets to and one child you want to disinherit, you can do that as well. Depending on your age, you may also want to think about grandchildren and other extended family members.
How do you want to transfer those assets?
Next, consider how you want to move the money to the next generation. A will can help, but it’s often not enough on its own. Maybe you want to guide your heirs’ spending by putting the money into a trust with clear instructions on how it is to be used. Maybe you want to use a trust to delay the transfer of that money until they’re older. You have many options. Trusts are especially useful when children or grandchildren are still minors. You want them to get the money, but not immediately or with no stipulations.
What do you need to do?
These questions just get you thinking about your estate planning and the importance of doing it. They likely bring up many more questions relating to your personal situation. It’s important to learn all that you can about your estate planning options at this time.