PROTECT WHAT MATTERS MOST SCHEDULE A CONSULTATION
Multigenerational Wealth Transfer Checklist

ESTATE PLANNING CHECKLIST TO FACILITATE MULTIGENERATIONAL WEALTH TRANSFERS

Gregory S. DuPont Nov. 30, 2021

Studies estimate that 70 percent of family wealth is lost by the end of the second generation and 90 percent by the end of the third generation.[1] To help your loved ones avoid becoming part of this statistic, you need to educate and update your extended family about your wealth transfer goals and the plan you have put in place to achieve these goals.

WHAT MUST YOU COMMUNICATE TO FUTURE GENERATIONS TO FACILITATE TRANSFER OF YOUR WEALTH?

You should consider communicating the following information to your family to ensure that they understand, and will be prepared to carry out, your wishes during a difficult time:

1. A net worth statement or, at a minimum, a broad overview of your wealth

2. Your final wishes for burial or cremation and memorial services

3. Estate planning documents that you have created and the purpose each document serves:

  • Durable financial power of attorney: designates who will be in charge of managing your accounts and property if you are living but unable to make decisions; states what authority your chosen decision-maker has; avoids a legal conservatorship, which is the court supervision of your financial affairs

  • Medical power of attorney: names who will be in charge of making medical decisions for you if you cannot make them for yourself; avoids guardianship, which is often an adversarial court proceeding

  • Advance directive or living will: clarifies your wishes regarding life-sustaining procedures

  • Health Insurance Portability and Accountability Act (HIPAA) authorization form: names the person you have chosen to access your protected healthcare information

  • Revocable living trust: avoids guardianship or conservatorship of your property during your life and avoids probate at death; keeps your final financial wishes private; minimizes delays, costs, and bureaucracy

  • Pour-over will or last will and testament: a catch-all for money and property not transferred into your revocable living trust or by beneficiary designation before death, or the primary means to transfer money and property in your sole name if you are not using a revocable living trust

  • Irrevocable life insurance trust: removes life insurance from your taxable estate; provides immediate access to cash for loved ones’ needs, administration costs, and taxes

  • Other advanced estate planning tools: protect money and property from creditors, predators, outside influences, and ex-spouses; enable charitable giving; minimize taxes; create dynasty trusts

4. Who you have chosen to make decisions if you die or are incapacitated or otherwise unable to make decisions while living, including the agents named in your durable financial power of attorney and medical power of attorney, the successor trustee of your revocable living trust and any other trusts you have created, and the personal representative named in your last will and testament or pour-over will.

 

5. The benefits of properly drafted lifetime discretionary trusts that you have created for your extended family:

  • Foster educational opportunities

  • Provide asset, divorce, and remarriage protection

  • Protect special needs beneficiaries

  • Allow for professional account and property management

  • Minimize estate taxes at each generation

  • Create a lasting legacy for future generations

 

6. Your goals and intentions for inheritances: what the money is and is not to be used for (for example, education, charity, business opportunities, or retirement instead of vacations and Ferraris), and who will be the trustee of any lifetime discretionary trusts created for your family members and why you have selected them

7. Location of important documents: this should include how to access your digital assets such as social media, online bank accounts, and crypto assets

8. Your key advisors and their contact information: estate planning attorney, financial advisor, certified public accountant, insurance agent, spiritual advisor, etc.

HOW CAN YOUR PROFESSIONAL ADVISORS HELP YOU COMMUNICATE YOUR WEALTH TRANSFER GOALS?

Your professional advisors are well-positioned to help you discover your wealth priorities, goals, and objectives and then communicate this information to your family. This will prepare your family to receive your accounts and property and not be left to figure out your intentions on their own, which could, as statistics have shown, risk them losing it all. 

We can assist you with determining your wealth transfer goals, creating a plan to achieve these goals, and effectively communicating this information to your loved ones. Give us a call at 614-389-9711.

[1]  About Us, The Williams Group, https://www.thewilliamsgroup.org/about-us (last visited June 25, 2021).