Different generations of high net worth individuals have very different priorities when planning how to distribute their wealth. A new Charles Schwab survey of more than 1,000 wealthy Americans (defined as those with more than $1 million in investable assets) finds that Millennials and Gen More than twice as much (53% and 44% respectively).
Still, high-net-worth baby boomers stand to lose millions of dollars — an average of $3.1 million each. Here’s how they plan to distribute the wealth.
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Affluent baby boomers are expected to transfer an average of $1.6 million through investments.
Susan Hirshman, director of wealth management at Schwab Wealth Advisor, said: “When considering moving investments, the first step is to determine the type of account in which the investment will be made, either a taxable account or a retirement plan. account.
“If it’s in a taxable account, check the name and ownership of the account,” she continued. “If in a retirement account, review beneficiary designations. For both, make sure they fit your needs, wishes, and overall estate plan, as designations and ownership are the driving force of the heirs, not your wishes or trust.
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The average millionaire baby boomer plans to pass on real estate worth $750,000.
“If you are planning to transfer a personal residence and you have multiple heirs, the key to a successful transfer is introspection,” Hershman said. “The dynamics among the heirs must be considered. You may want to keep the home in the family, but Will they?
If you plan to transfer real estate to multiple recipients, Hershman recommends asking yourself the following questions:
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Will they be good partners in developing and agreeing how usage and costs will be shared?
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Does either one of them have liquidity needs and want to sell before the other?
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Does anyone own their own vacation home or have a vacation style that doesn’t match the vacation home they inherited?
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Will any heirs face financial difficulties due to ongoing maintenance costs?
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If there is a mortgage on the property, will all heirs be able to pay it back?
“Also, if you do have a revocable trust, is the property properly titled — that is, if you set up a trust after purchasing the home, did you change the title to reflect the trust — to avoid probate?”
