The term “generational wealth” typically brings to mind those who are rich and famous. You can often see it used in association with families whose fortunes date back decades or even centuries, with the idea that they have so much wealth that the descendants of those who earned that wealth may never have to work for a living, if that’s what they wish.
However, passing on assets to your loved ones and cherished causes transcends financial status. In other words, “generational wealth” is in the eye of the beholder.
The more money you have, the more you might need complex estate planning strategies. But for many of us, the most efficient path to sharing the wealth with our relatives includes the use of relatively simple legal instruments such as wills and trusts.
Trusted tools for sharing the wealth
Wills and trusts both serve as powerful tools for ensuring that assets are distributed according to the owner’s wishes. And while they differ, they’re not mutually exclusive. Working with a trusted financial professional, estate planner, and/or tax attorney is the best way to determine what works for you.
A last will and testament is a legally binding document that outlines how an individual’s assets should be distributed after their death. It allows for the designation of beneficiaries, specifies how property should be divided, and can provide instructions for the care of minor children.
Upon death, though, wills often require the assistance of a probate court to move assets to heirs. That’s a public process, something to keep in mind should you go that route.
Commonly used revocable, or living, trusts, on the other hand, can be changed easily along the way and typically don’t require probate. They can make it much easier to keep your financial affairs private. And you can serve as your own trustee during your lifetime, remaining in charge of managing your assets while you’re still alive and able.
Ensuring your legacy while empowering theirs
Regardless of your estate’s size, you can view sharing those assets as a privilege, a responsibility, and an opportunity. It doesn’t take billions or even millions to make a difference for the next generation, to open the door for an education, to a home, to a business opportunity.
Viewed this way, generational wealth isn’t just about the zeros in a bank account; it’s about the impact we make, and living trusts and wills can be inexpensive ways to ensure that the fruits of your labor benefit the people and organizations you care about most.
Whether you use a will or a trust or both, sharing your assets after you’re gone represents a continuation of values, traditions, and the hard work of previous generations. By taking the necessary steps to ensure that assets are passed down as intended, you can create a lasting legacy.
This article was written by Marc Rapport from The Motley Fool and was legally licensed through the DiveMarketplace by Industry Dive. Please direct all licensing questions to legal@industrydive.com.
Equitable is the brand name of the retirement and protection subsidiaries of Equitable Holdings, Inc., including Equitable Financial Life Insurance Company (Equitable Financial) (NY, NY), Equitable Financial Life Insurance Company of America (Equitable America), an AZ stock company, and Equitable Distributors, LLC. Equitable Advisors is the brand name of Equitable Advisors, LLC (member FINRA, SIPC) (Equitable Financial Advisors in MI and TN). This informational and educational content does not offer or constitute financial, insurance, investment, legal, tax, accounting, or general lending advice. Your unique needs, goals and circumstances require and deserve the individualized attention of your own financial, legal, tax and other professionals.
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