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Navigating the Great Wealth Transfer

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What You Need to Know

  • Putting plans in place takes time.
  • Talking about passions works better than talking about death.
  • Communication will make a plan work better.

Over the course of the next 22 years, more than $84 trillion in wealth will be changing hands to the next generation, according to Cerulli Associates data.

Yet, the Cerulli study shows, nearly half of investors with at least $1 million have no wealth transfer plan in place.

On top of that, only 13% of investors will use the same financial professional as their parents.

I get it. Having money conversations with family can be hard.

But we know that hard conversations are often the most impactful.

You can bring tremendous value to your clients, and build and sustain your business, by helping families navigate the great wealth transfer.

Start the wealth transfer conversation.

Be patient! It’s important to stress that there’s plenty of time to decide on specifics.

This really hits home for me, since my parents are the type of people who feel like they’re never going to die.

These types of conversations can be pretty nerve-wracking for them.

After my grandmother passed, my mom struggled with closing the estate.

These challenges made my parents realize we as a core unit needed a plan in place for their estate.

Now, we as a core unit know exactly what the plan is, where the documentation exists, and who we should call when something happens to them.

Getting a plan in place is not a one-time conversation.

They’ve made some changes in the last few years and continue to inform my sister and me.

This puts us all on the same page with their plans for the estate after they’re gone.

The conversation doesn’t have to be all doom and gloom.

Try to make the wealth conversation more about things they love by identifying their passions and values.

For me, my parents have always tried to save what they’ve earned, enjoy life, and value family above all else.

I’ve always known how hard my parents worked and couldn’t be more proud of them.

Their perspectives have shaped the way I save money and invest today.

Our estate planning conversations have made my sister and me want to continue my parents’ legacy and model our lives to be more like them.

Some families may rely on you to moderate their wealth transfer conversations.

This is a good time to explain your intentions and ask good questions.

By following this simple agenda, you’ll empower your clients and their families to discuss their wealth transfer plan.

1. Purpose of the meeting: Address the fact that you’re here to review goals and educate the family about legacy conversations.

2. Set meeting expectations: Remind everyone involved to be respectful and to actively listen.

3. Allow the parents to share their story: Let them talk about how they accumulated their wealth, how they like to use their wealth to express their core values, and perhaps shed some light on some of the biggest money mistakes they’ve made along the way.

4. Open up the conversation: Allow other family members to ask questions.

5. Next steps: This conversation is not a one-time event. This is a process, so it’s important to give each attendee an action step to follow up on during the next discussion.

Figure out how to implement the strategies.

We have the conversation started and everyone is on board that more can be done to help facilitate the transfer of wealth.

Now what?

It’s important to implement a strategy to get the answers to four simple questions.

1. Who will receive the wealth?

2. When will they receive it?

3. What will they receive?

4. How will it all work?

By discussing these four questions, you will be able to communicate the wealth transfer plan to the heirs now, instead of waiting until they are in the grieving process.

Reading the will pre-death allows people the opportunity to ask questions and voice concerns.

This will help get everyone on the same page sooner about how the inheritance is structured and how it will work.

@Engage the children.@

As I referenced earlier, 87% of affluent investors will use a different financial professional than their parents.

I understand that someone in their 20s or 30s may not have much financial capital to offer your book of business right now, but that should not prevent you from trying to connect with the younger generation.

Remember, we are talking about $84 trillion changing hands in the next 22 years.

Consider starting the conversation by discussing available resources on managing student loan debt and sustainable investing.

By helping them deal with their current situation, you can become their go-to financial professional.

Are you prepared?

The great wealth transfer is here, and it isn’t slowing down any time soon.

You need to make sure your practice is ready.

The more you’re able to involve your clients and their children, the better prepared they will be for the inheritance process and the more likely you are to hold onto these assets when they change hands.

Kylie Murray. Credit: SammonsKylie Murray is the director of practice management at Sammons Institutional Group.




Credit: Adobe Stock


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