The world is constantly changing, and often, the changes are unpredictable. However, the fluidity of the marketplace also makes room for and creates new and different opportunities for clients to take advantage of. Whether it is to protect their legacy, continue growing their wealth while use sophisticated tools to transfer that wealth to either their heirs or an entity of their choosing, clients have an unlimited amount of new information and resources to help guide them.
Right now, the waves of changes have impacted families and their wealth, thus creating the perfect trifecta. The trifecta includes: firstly, the transfer of wealth to maintain the familys’ legacy. Second, the emerging research on how generations differ on their ideas and purpose of their wealth, and finally, the realignment of values and the impact that it has on society.
Change is imminent in transferring wealth, and according to data from Cerulli, we are now two years into the 25-year wealth transfer period in which more than $68 trillion will be moved to heirs and charity. Even more immediate, within just the next 10 years, 37% of next-generation family members are preparing to take over their family wealth. This shift in financial power has ripple effect throughout society.
According to data, the next generation who will take over their familys’ legacy and wealth have already defined that their goal is less about generating more wealth, and more about defining the purpose and creating meaning to their familys’ legacy. This systemic shift suggests that as these millennials are taking control of their familys’ wealth, the desire to create meaning and purpose is as equally important to them.
This is where we come in. Our entire focus is to minimize or reduce the tax liability. If the first generation today does not implement proper planning structures and proper design, and with the federal estate tax being at 40%, it is a possibility that a large portion of their estate will end up in the governments’ hands. The window of opportunity with the current incredibly high exemption numbers also provide the best chance for these high-net worth familys’ to preserve their wealth. If the first generation loses much of their wealth due to poor planning, the next generation will not be able to succeed in continuing to create the unique purposes and goals behind their families legacy.
While change is imminent, a few thing remains certain. People want to preserve their wealth. Right now, is the time to plan. Right now, is the time to preserve the wealth and legacy that you have worked so hard for. Right now, is the time to preserve your wealth because if you do, the next generation will create that profound meaning and purpose to it. Because really, that’s what a legacy is. By paying the clients’ estate taxes on 10 cents on a dollar, or 1 cent a year for 10 years, we can help preserve that wealth and create more meaning to the families legacy, as it continues for generations to come.
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