Kingston: Creating Generational Wealth | Business
Many Americans with large assets do not consider themselves rich. Yet, when questioned, a large majority wish to transfer their assets to heirs and charitable interests upon their death. Retirees can be surprised by the growth of their investment assets and even those with modest assets can pass them on to future generations.
Income reinvestment and compounding are remarkable principles, leading to the gain of well-managed securities and real estate portfolios over time. Educating your heirs on the value of keeping invested assets and allowing them to grow can lead to generational wealth. The LIMRA Secure Retirement Institute says more than $ 7 trillion will be transferred to Baby Boomers, Gen Xers, and Gen Yers over the next few years. Over the next 20 years, it is estimated that $ 30 trillion will be transferred from baby boomers to subsequent generations.
Landowners, by making wise decisions, can transfer assets that can produce income for future generations. Often, when an individual receives a significant inheritance, without prior communication and education, the inherited assets can be quickly consumed. Americans who have accumulated assets, including portfolios of securities, real estate, and business interests, rely on those assets to generate income during their retirement years, without depleting capital. Good planning and communication with your heirs can allow them to use the income only from the inherited assets, allowing the principal to remain intact, possibly for subsequent generations. Educating your heirs about the specific assets you own, why you own them, and how you envision those assets continuing to benefit them, can play a vital role in safeguarding your inheritance by your heirs.
Many successful real estate owners turn to professionals, including financial advisers, estate lawyers, and tax advisers, to help them develop and protect their wealth. A professional financial advisor will help provide strategic financial planning, investment management, and important advice in the process of growing and preserving assets. Estate lawyers and tax specialists are essential in protecting assets with proper documentation to preserve and transfer wealth while minimizing loss of assets due to taxation. The use of various types of trusts can allow assets to remain intact longer for the benefit of heirs and reduce the decisions that must be made immediately after the death of an estate owner. Be sure to consult your financial professional regarding your specific situation.
Involving your heirs in meetings with your professional advisers is a valuable next step to inform them of your objectives, better equip them to manage your assets for you in the event of incapacity and prepare them to inherit your assets. “Money can be the shell of many things, but not the core; He brings you food, but not an appetite; medicine, but not health; acquaintances, but not friends; servants, but not faithfulness; days of joy, but no peace and happiness. – Henrik Ibsen.
Instilling in future generations moral values, a desire to improve themselves, to invest in their education, and a desire to help others can endow them with a healthy respect for the proper use of any inheritance they may receive. . Generational wealth will pale in comparison to the legacy of our generational values.
Kevin Kingston, CLU, is Managing Director and Financial Advisor at Savant Wealth Management; savantwealth.com
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