Does Your Estate Plan Pass the Multigenerational Test?
"Life happens" for every generation: parents, children, grandchildren, or great-grandchildren. So, it is important to consider how you want to leave your legacy through multi-generation estate planning.
According to a recent Forbes article, the amount of wealth that will pass down from generations over the next decade will be more than any generation in the history of the world, but you need to be prepared whether you are passing this wealth down or receiving it.
When it comes to most families, each generation completes its own estate plan. However, most estate plans don’t adequately ensure assets remain protected and that wealth is transferred between generations. As time goes by and your family’s estate plans age, these plans may no longer be sufficient when it comes to meeting new needs: growing families, divorces, and remarriages, for example.
As families grow and plan for the future, there are many options to consider. Parents worry about having enough money to pay for college. Excited grandparents think about giving a check to the newborn to celebrate the birth. The grandparents send the money, and the new parents open college savings accounts because they are very easy to open.
This is a simple short-term solution, with money growing year after year, but these types of accounts aren’t as effective as family wealth grows over the next decades. It goes without saying that it's difficult to predict what the future will bring. But the best family estate plans happen when communication occurs between generations.
Instead of a check, a better option for a newborn might be a gift trust. An estate planning attorney can help your family structure such a trust properly. Grandparents can make a gift and pay the taxes on behalf of the trust, protecting their legacy by providing tax-free benefits to the newborn.
Overcoming multigenerational communication barriers
There can be many factors that make family communication difficult. One approach is to find an estate planning lawyer and leverage them to guide the family to overcome these communication concerns.
Knowing which generation currently has more income and assets is key to creating a successful plan. For example, a trusted third-party advisor will understand each generation's circumstances as life unfolds. They can then independently guide the family to help ensure wealth remains protected, without revealing exact earnings, assets, income, and net worth.
As estate planning laws evolve, an experienced lawyer will be proactive. They will meet with you regularly to better understand each generation's needs, which will allow for more efficient communication and collaboration for your entire family estate plan over time.
Tell us about your family’s plans for the future
There can be a welcome sense of relief when your estate plan comes together. That's because you know you've protected and accounted for your future. But you need the right attorney to find the right solution for your family, and an experienced estate planning attorney from The Law Firm of Brown & Jensen can help.
Creating an estate plan is about your future, your family, and your legacy, so you need to get it right. Contact us today to get answers to questions you may have about multigenerational estate planning. We proudly serve clients in Mesa, Tucson, Scottsdale, Chandler, Peoria, Goodyear, Payson, and Show Low.