Generational Wealth: Passing Financial Security to the Next Generation
It’s not just about what you leave behind — it’s how you do it
Leaving behind a strong and secure legacy takes more than just being smart with your money. It takes planning ahead, talking clearly and openly with family and wealth advisors, and knowing how to use the many tools at your disposal to protect and grow your money. These foundational steps will get you started.
Draft an estate plan and name your beneficiaries
An estate plan guides how your money and property are managed and distributed after you pass away. It names your beneficiaries – the people you want to receive your assets – and explains what everyone receives. Without an estate plan or beneficiaries, your assets might go through probate, a lengthy and complicated court process which can cause delays and create confusion.
Some financial accounts – like retirement plans, life insurance policies and certain bank or investment accounts – let you name beneficiaries directly through Payable on Death (POD) or Transfer on Death (TOD) designations. These designations take priority over your will, meaning whomever you name will receive the assets, no matter what your will says.
Tip! Review your beneficiary designations regularly, especially after major life events like marriage, divorce, births or deaths.
Get the right documents in order
To make sure your estate plan is properly set, you need all the necessary legal documents to be in place. Each one ensures your wishes are followed and reduces the burden on your loved ones during difficult times.
- Living will – Communicates your wishes regarding end-of-life care
- Last will and testament – Outlines how your assets should be distributed and who will oversee your estate
- Durable financial power of attorney (POA) – Allows someone to manage your finances if you’re unable to
- Healthcare power of attorney (HCPOA) – Names someone to make medical decisions on your behalf
Tip! At a minimum, have a will in place, or your estate will be distributed according to state intestacy laws, which may not reflect your wishes.
Consider a trust
A trust establishes that one person (a trustee) can hold, manage and distribute your assets. Trusts tend to be associated with the wealthy, but they are smart and valuable tools for families of all sizes.
A trust doesn’t replace the need for a will or other documents, and it must be properly funded and maintained to be effective. A good trust will:
- Provide structured support for children and/or grandchildren
- Protect assets from creditors or future divorces
- Avoid probate and keep your affairs private
- Minimize estate taxes in certain situations
Tip! Speak with one of our wealth advisors or an estate attorney to decide whether a trust is right for you.
Decide who’s responsible for your assets after you’re gone
Any POAs or HCPOAs you’ve set up lose their legal binding after you pass. That means you need to establish who handles which responsibilities within your estate before that happens. This can include:
- Your executor (named in your will)
- A trustee (if you’ve established a trust)
- Direct beneficiaries (for accounts passed via POD or TOD)
If you have nothing in writing, your assets will pass directly to a state-designated beneficiary outright with no restrictions.
Tip! Speak with an estate attorney to establish the responsibilities of those listed in your estate.
Share important information with your loved ones / beneficiaries now
One of the best ways to create transparency and avoid questions is to talk to everyone you want involved with your estate. Plan a time to have a conversation, in person if possible, and explain:
- Where you have accounts and where your documents are kept
- Who’s on your financial team (bankers, wealth advisors, attorneys, tax professionals)
- The structure of your estate plan
This can help manage expectations and prevent misunderstandings later. It may also serve as a motivator for your loved ones to prepare their own estate plans.
Tip! Don’t wait until it’s too late, have the conversation with your loved ones today.
Consider giving away some assets early
Transferring wealth while you’re alive can be a smart and meaningful way to help your loved ones and reduce the size of your taxable estate. This also gives beneficiaries the chance to develop financial responsibility under your guidance.
You can gift up to $19,000 per person per year (per spouse) without triggering gift tax reporting requirements. These gifts can support education, housing or business ventures and give you the joy of seeing your legacy in action.
Tip! Talk with your advisor about ways to include charitable giving in your financial plan.
We’re here for you
Our wealth management team can help you turn today’s decisions into tomorrow’s legacy. We have experience you can trust and will work to create a plan that’s unique to you. To start the conversation, fill out this form and one of our local wealth advisors will contact you.
This information is intended for general informational purposes only and does not constitute legal or tax advice. Please consult with a qualified legal or tax professional regarding your specific situation. Investments and other non-deposit products are not deposits, not FDIC insured, not guaranteed by the bank, and may lose value.