|Planning Through the Generations|
|Written by Wendy Hartman|
|Monday, 25 June 2012 00:00|
Overview: Multigenerational planning involves the transfer of wealth, but it also extends to intangible concepts such as family values and legacy wishes.
Conversations about multigenerational planning begin with the first generation. The success of an estate plan can depend on whether the details of that plan have been properly communicated to family members. Therefore, it is helpful to be educated on how the estate plan works, proper steps to take and how wealth will be transferred to following generations.Three main questions help establish a framework for subsequent discussions:
Once you are comfortable with how the estate plan functions, talking to the second generation (in most cases, your children) is an appropriate next step. The tendency might be to focus on issues that are strictly financial in nature, not on preparing them for their impending responsibilities. An estate plan is likely to fail if family members are unprepared or communications break down within the family unit.
The following questions can be useful when thinking about how to start a conversation:
When estate planning extends beyond children to the next generation, it often involves providing for future education costs. For grandparents who wish to provide financial support for their grandchildren’s education expenses, generation skipping can be a useful tool.
Strategies to Help Prepare the Next Generations
Inexperience with handling money and managing budgets
Concerns about overemphasis on material possessions
Concerns that spending will lead to overspending
The benefit of family meetings is to discuss how the estate plan works as well as bringing the generations together. All family members can be informed about how they will be affected and what the plan will look like when triggered. Family meetings can also help set the expectations of values and ethics, spending, charitable giving, and planning for future generations that are to be carried on throughout the family legacy. A family meeting also opens up a dialogue if there is a need to create a separate trust for children or grandchildren to protect the family wealth from potential problems.
Advisor Support Roles
The primary purpose of planning is to efficiently transfer family wealth. As a sometimes unexpected benefit, openly discussing goals and objectives can also strengthen relationships throughout the entire family.
This material is derived from sources believed to be reliable, but its accuracy and the opinions based thereon are not guaranteed. Indices are not available for direct investment. Their performance does not reflect the expenses associated with the management of an actual portfolio, nor do indices represent results of actual trading. The articles and opinions in this publication are for general information only and are not intended to serve as specific financial, accounting or tax advice. Copyright © 2012, Buckingham Family of Financial Services. All rights reserved. This material may not be copied or distributed (electronically or otherwise) without the written consent of Buckingham Asset Management. The products or services described herein are available to US citizens and residents only and the information contained is intended for such persons only. No information contained herein is an offer to sell. Investors should read the prospectus of a security prior to making any investments.
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|Last Updated on Wednesday, 14 November 2012 14:37|