Planning for Generational Wealth Transfer

Passing wealth to the next generation is usually framed as a legal task: a will, a trust, a set of beneficiary forms. The documents matter, but families who do this well tend to treat it as a series of conversations that the documents then record.

Start with what the money is for

Before any structure is chosen, it helps to agree on the purpose. Is the aim to fund education, keep a family business running, support a cause, or give heirs a foundation without removing their need to work? The answer shapes every choice that follows.

The documents to review

• Wills and trusts. These set out who receives what and when, and who is responsible for carrying it out.
• Beneficiary designations. Retirement accounts and life insurance pass by these forms, not by the will, so they need to match the plan.
• Powers of attorney and healthcare directives. These cover the years before a transfer, when decisions may need to be made on someone's behalf.

Bring the next generation in early

Heirs who understand the plan, and who have met the advisors and attorneys involved, are better placed to carry it out. Many families hold a yearly meeting where the plan is explained, questions are taken and responsibilities are handed over gradually.

Revisit it

Marriages, births, a move to another state and changes in tax law can all leave a plan out of date. A review every few years, and after any major life event, keeps it doing what it was written to do.

This article is for educational purposes and is not legal, tax or investment advice. Work with a qualified estate attorney on your own plan.