In March 2024, CBS News reported that “millennials could become the richest generation ever by 2044.” This is thanks to the $90 trillion in assets predicted to flow from one generation to the next.

This transfer of wealth is a wonderful gift, but it can quickly turn into a burden if not handled properly.

A recent study, highlighted in Forbes, illuminates the concerns brewing among high-net-worth Baby Boomers regarding the inheritance they’ll leave behind for their children.

According to the study:

1. Concerns about Wise Usage: A staggering 70% of high net worth (HNW) investors express worry about how their heirs will utilize the inherited wealth. This concern reflects a broader apprehension about whether the next generation will manage their hard-earned assets responsibly and effectively.
2. Smooth Transfer of Assets: For 76% of wealthy Boomers, ensuring a seamless transfer of assets ranks among their top financial worries. The desire for a smooth transition underscores the importance of maintaining financial stability and continuity within their families.
3. Tax Optimization: Another significant concern, shared by 70% of respondents, revolves around the most tax-optimized way to pass money to heirs. This reflects a desire to preserve wealth and a recognition of the complexities and implications of tax laws and regulations.

These findings paint a picture of the intricate web of considerations that affluent Baby Boomers grapple with as they contemplate their legacy. It’s not merely about passing down wealth; it’s about ensuring that the wealth is managed responsibly, transitions smoothly, and is optimized to minimize tax burdens.

So, how can you ensure your inheritance goes where you want it to and is used how you envision it?

Here are a few strategies that might help alleviate some of the stress of giving an inheritance.

1. Comprehensive Planning: We take a holistic approach to wealth management that goes beyond investment strategies. In this way, we can help develop comprehensive plans that address your specific concerns and goals regarding inheritance.
2. Education and Communication: We encourage our clients to discuss their wishes, values, and expectations with their children to ensure a shared understanding of wealth transfer plans.
3. Tax-Efficient Strategies: We’ll develop tailored strategies that optimize wealth transfer while minimizing tax liabilities. We also ensure we’re up to date on any changes in tax laws and regulations to adapt your plan as needed proactively.
4. Legacy Planning: We’ll discuss your legacy beyond financial assets. Together, we’ll discuss your values, philanthropic goals, and non-financial assets you wish to pass down to future generations.
5. Regular Reviews and Updates: It’s important that we schedule regular reviews so that we can update any changes to your plan. Life circumstances and financial goals may change over time, necessitating adjustments to ensure alignment with your evolving needs and priorities.

While money can be a wonderful and welcome gift to your heirs, we understand that it comes with its own set of worries. We know that you want to ensure the wealth you worked so hard to accumulate and manage is passed down in the most efficient way possible so that this gift doesn’t become a headache to those who receive it. Ultimately, it’s not just about the money; it’s about ensuring a lasting and meaningful legacy for generations to come.

Are you ready to discuss your legacy plan? We’re here to help. CLICK HERE to get started.

 

8 Thoughtful Questions to Shape Your Legacy Video

What milestones had a significant impact on you? What core values have guided you through life? What financial principles and strategies have you found most valuable? Creating a Legacy Video is a great way to share your thoughts, suggestions, and wisdom with future generations. Download our 8 Thoughtful Questions to Shape Your Legacy Video!

 

All opinions expressed in this blog post reflect the judgment of Approach Retirement Advisors, LLC (“Approach”) as of the date of publication and are subject to change. The information in this blog post is believed to be factual and up to date; however, we do not guarantee its accuracy. This blog post should not be regarded as a complete analysis of the subjects discussed. This presentation is for educational purposes only and does not constitute personalized investment advice. A professional advisor should be consulted before implementing any of the strategies presented. This blog post should not be construed as an offer to buy or sell or as a solicitation of any offer to buy or sell any securities mentioned herein. Clients and members of Approach may own any securities mentioned herein. Investments are subject to market risks and potential loss of principal invested, and all investment strategies have the potential for profit or loss.  Past performance is no guarantee of future results. Different types of investments involve varying degrees of risk. There can be no assurance that any specific investment will be suitable or profitable for a particular investor’s portfolio. There are no assurances that any portfolio will match or outperform any particular benchmark.