Steps You Can Take to Leave a Legacy

11/8/2023 8:00:00 AM

Wealth Transfer Planning 2023

Why planning is key for passing your wealth on to the next generation

If you’ve been thinking about what kind of legacy you want to leave your children and grandchildren, you’re not alone. According to research firm Cerulli Associates, the U.S. is in the early stages of a significant multigenerational wealth transfer as Baby Boomers – born between 1946 and 1964 – begin passing on their wealth. 

That process will continue past 2045, Cerulli’s research estimates, and will involve more than $70 trillion changing hands from Boomers primarily to Gen X’ers (born between 1965 and 1980) and Millennials (born between 1981 and 1996).

With so much at stake, thorough planning is essential as you begin to think about what you want to pass on to your family and how you want to do it. Without the necessary documentation, and without establishing clear expectations with your family, it’s unlikely your wishes will be carried out.

No matter your situation or level of wealth, here are steps you can take to begin preparing now.

Create or update your will

You can have a clear picture in your mind of what you want to pass on, but your best intentions could be waylaid if you don’t actually document your thoughts. That’s why it’s important to complete a will, which is a legal document that lays out how, and to whom, you want your assets distributed after your death.

Without a will, your family could argue over who should get what, and your assets could be held up in court as a judge determines what actions should be taken. Completing a will that clearly lays out your wishes can go a long way in helping you and your family hopefully avoid any such confusion or complications.

Name your beneficiaries

In addition to creating a will, you also should make sure you’ve named a beneficiary for assets like your retirement accounts or life insurance policies. You also may designate beneficiaries for bank and brokerage accounts. A beneficiary is a person or institution you want to receive your assets when you pass away.

Beneficiary designations work similarly to wills in the fact that both can indicate how you want to pass on assets after your death, but they’re different in several key aspects. A beneficiary designation only applies to a single account or product, while a will can direct how all of your assets should be distributed (which could include real estate, personal items, collectibles and other types of assets).

The way that assets are distributed is also different. When someone passes away, assets with beneficiary designations transfer more quickly than assets covered by a will, which follows a legal process known as probate prior to distribution.

Beneficiary designations can override your will if the directions are not consistent, which means it’s important to make sure your assigned beneficiaries align with the general wishes indicated in your will. Completing and updating both as part of a cohesive estate plan can go a long way to preparing to pass on your legacy.

To add or update a beneficiary on your Bell Bank deposit accounts, visit a branch near you to meet with a personal banker, or call our customer service team at 800-450-8949 for assistance connecting with a banker who can help.

Start discussing your plans

Beyond wills and beneficiary designations, it’s crucial to start having conversations with your family about your wishes sooner rather than later. For many, this can be a challenging topic to bring up in conversation. Money and the idea of your death and eventual passing may feel too delicate or awkward to discuss with family. It may be tempting to keep putting these conversations off, but having these discussions now will reduce family stress in the future. Not providing context around your wishes or establishing expectations for your beneficiaries can put your plans at risk when it comes time for your family to receive their inheritance.

Let your family know what you’re planning, and ask if they have any questions. Tell them about your hopes and goals for passing your inheritance on to them, and ask how they see themselves carrying on your values.

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Working with a Professional

Planning the legacy you want to leave can be complicated and can feel overwhelming, but you don’t have to do it on your own. A wealth advisor can help facilitate discussions with your family when you’re ready – contact Bell Bank Wealth Management to begin the planning process.