While many think of wealth succession as something they only need to worry about later in life, it should actually be an integral part of your financial plan as early as possible. Of course, you will need to routinely revisit and amend your plans, but having the right plan in place will help you stay on track and ensure you have secured your family and loved ones’ futures.
This does not constitute advice and advice should be sought in all instances before acting on it.
A solid wealth succession plan ensures that your assets are passed down to your family exactly how you wish. There are a few essential questions that wealth succession planning covers:
- When do I want to transfer my wealth?
- How much wealth do I want to pass on?
- Whom do I want to pass my wealth on to?
- How do I want to transfer my wealth?
The answers to these questions will help form the basis of your wealth succession plan and are closely connected. With careful consideration and a little forward thought, your assets will be safe in good hands for generations to come.
When to transfer wealth
A will is not a one-and-done document; it constantly needs to be updated based on your current assets, life situation, and the impact of current legislation. Transferring assets while you are still alive can actually be beneficial, to both yourself and your beneficiaries. By delaying wealth transfer until after you’ve passed, there is no fear of being unable to live the lifestyle you’ve worked for. However, giving gifts while you’re still alive allows you to see your family or loved ones benefiting from your hard work right alongside you. It can also be a way to save on tax. No matter what your objective is when it comes to wealth succession, finding the balance between preserving your own lifestyle and enriching your loved ones’ is the main objective.
How much to pass on
Determining exactly how much wealth you pass on will depend on a few things. You’ll need to take taxes, estate planning costs, inflation, and investment fluctuation into consideration and plan accordingly. Whatever your goal is for your beneficiaries — like providing money for university a home deposit, etc. — you’ll need to ensure the amount you’re passing down will cover it.
Who to pass you wealth on to
This might be the simplest, yet most difficult question to answer if you are fortunate enough to have many family and friends. Ultimately, who you pass your wealth on to is your choice, but that might change the way you pass on the wealth. For example, grandchildren not old enough to control their own money will require a trust, which will hold the money until they’re able to use it. Or perhaps, you’d like to give some money to charity along with family members. Whoever you choose to include in your wealth succession plan is up to you, but still only part of the planning process.
How you transfer wealth
There are a variety of options when it comes to transferring your wealth, so it’s important you understand them and how they’ll help you reach your goals. When, how much, and to whom you pass on your wealth will inform how you transfer your wealth. Timing and affordability should be top of mind during the process to ensure a smooth transfer of wealth.
Get professional help
There’s no other way to ensure your wealth is passed down to future generations according to your wishes besides wealth succession planning. For help getting started or to revisit your plan, contact the experts at Dental & Medical Financial Services today.