Wealth transfer is a two-way street



Are you expecting an inheritance or expect to provide one to a loved one?

Recently, metro Atlanta high-net worth (HNW) investors, aged 25 to 75 with $100,000 or more in investable household financial assets, were asked about wealth transfer in a Morgan Stanley investor poll.

The poll found that a 64 percent majority of Atlanta HNW investors plan to transfer money at some point in their lifetimes. Of those, 47 percent plan to transfer half of their assets with children far and away the most favored recipients.

So how do we best prepare ourselves and our loved ones for financial events that may open up opportunities for future generations? A customized wealth transfer and estate plan can provide the opportunity to take charge of how your assets are managed and ensure they are distributed according to your instructions. There are specialized and legal tools that you may want to consider:

• Protect yourself and your heirs with a will that provides instructions upon your death for the distribution and management of your property. If you die without a will, your assets are distributed according to state law, which may not correspond with your wishes.

• Consider a trust to meet varying personal, financial, investment, tax and estate planning needs. As grantor, you control each major aspect of your trust. You, along with your attorney, create the language used to govern the trust, so you dictate how distributions are made and to whom.

• Life insurance plays a major role in the wealth management process and represents a very flexible estate planning tool.

• Retirement plan assets may be among the major components that make up your estate and provide the beneficiary(ies) you name with options that can stretch out distributions over their own life expectancy.

• Most importantly, communicate your wishes (if applicable) — authentic communication builds trust and understanding. It’s important for your loved ones to know what they are receiving and how you hope this gift will have a positive impact on their lives.

Happily for some of us, the poll findings also found that among Atlanta HNW investors, 39 percent expect to be a beneficiary of a transfer of money or other assets in the future and nearly all say the transfer will come from a family member. Even more encouraging, when asked about their long-term financial goals — 89 percent were confident they would reach them. I hope individuals — of any income — continue on a path of financial and estate planning with long-term financial goals in sight.

Kristen Fricks-Roman, CFP, CRPS is senior vice president, financial advisor at Morgan Stanley, Atlanta.

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