Preparing for the Great Wealth Transfer

Older Asian couple holding a heart

As published in the Star Advertiser on September 19, 2018.

Economists and financial analysts have estimated that aging baby boomers — the wealthiest generation in history — will hand down upwards of $30 trillion to their heirs over the next few years. This significant shift in assets from one generation to the next even has a name: the Great Wealth Transfer.

Seniors have much to think about when it comes to transferring wealth to their children and grandchildren. Consider the following if you want to leave something behind for the next generation.

Do You Have an Estate Plan?

If you don’t, you’re not alone. According to a 2017 survey from, more than half of Americans don’t have a basic plan in place for when they die, which can place the burden on loved ones to distribute assets.

At the very least, adults should consider whether preparing a will or a power of attorney is appropriate for his or her situation. A will may be used in certain situations to designate beneficiaries for real property, financial assets and family heirlooms, or to designate guardianships for minor children. A power of attorney may be used to designate a trusted agent who may make financial and healthcare decisions on your behalf now or when you become incapacitated. Learn more about estate planning through a free interactive eLearning video at

Do You Need a Trust?

A trust may be a good option in certain situations for those looking to pass on their wealth to the next generation while avoiding the time and costs associated with probate court. It also may allow greater control over how assets are transferred to children and grandchildren. There are many different types of trusts, so it is important to determine which structure will best fit your needs.

What Are Your Plans For Long-term Care?

The U.S. Department of Health and Human Services reports that approximately 70 percent of people over 65 will need some level of long-term care, for an average of three years. Many people vastly underestimate long-term-care costs or believe they’ll never need it, but this type of care can quickly deplete savings and leave next to nothing for heirs.

Consider long-term-care or chronic illness insurance, which often has high premiums, but may pay benefits for qualifying ongoing care or for a qualifying chronic illness. Or, make sure to build the cost of care into your retirement savings plan to ensure you’re prepared to handle the costs if the need arises.

How Can You Minimize Taxes?

It may be possible to make gifts of up to $15,000 per recipient per year as of 2018 without paying gift taxes. Placing this gift in a 529 college saving account may allow for tax-free growth if the funds are used for qualified educational expenses.

If you plan on leaving some of your estate to charity, consider which assets are best suitable, and options that can be considered to maximize the benefits to the charity and to your heirs.

Your financial advisor can help you implement a financial plan designed to fit your needs. Ensure you make your priorities known so your financial plan achieves your goals, provides for your loved ones and honors your legacy.

About HSFCU Marketing

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