Investing for the Next Generation. Once you're settled into retirement, you may want to consider passing a legacy on to your loved ones. You'll want to transfer your assets with as few surprises as possible—for you and them—and you may also want to seek investment options that will potentially grow the legacy you're leaving. It will be important to discuss the specifics with your beneficiaries, to ensure you can transfer your estate in a way that will be as timely and tax efficient as possible.
Nothing to Chance
It's crucial to correctly state your key designations on all financial accounts to make sure assets pass to your desired beneficiaries at the right time and in a tax-efficient manner. Errors and misnamed accounts can have unanticipated consequences, such as:
- Needless expenses and taxes
- Potential of disinheriting children or grandchildren
- Delays in providing for the financial needs of loved ones
To start the process, gather all the information for your accounts (or have your financial professional help). Next, review all documents to verify they are up to date, in proper order, and are in line with your ultimate objectives. At this point you may want to gather your beneficiaries to discuss their options and allow them to ask questions.
Also keep in mind that your legacy priorities may change due to significant events in the lives of your loved ones, at which time you may want to update your designations. Such life events may include:
Passing It On
You'll have several options available for how your beneficiaries will receive an inheritance. Review these options with them so they can learn how to optimize their inheritances in a tax-efficient manner.
Control From the Grave
Unfortunately, you may have beneficiaries you believe aren't experienced or responsible enough to effectively manage an inheritance. You may want to seek options that can protect your legacy, allow you to restrict distributions to the next generation, and provide for all beneficiaries. It's important to discuss with a financial professional your options for controlling how your legacy is passed on.
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