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How to Prepare for the Great Generational Wealth Transfer

December 18, 2023
Hancock Whitney Financial Planning
Hancock Whitney Financial Planning

In this series, we’re helping you with your generational wealth management planning. In Part 1, we shared advice on creating family and professional wealth management teams. In Part 2,  we discussed family finance meetings and creating a family wealth mission statement. In Part 3, we helped you build your estate plan and generational wealth management strategy. Here, in our final installment, we share advice to help you prepare for the actual intergenerational wealth transfer.

 

How to Prepare for the Great Generational Wealth Transfer

 

What are intergenerational wealth and the "Great Wealth Transfer"?

Whether you call it intergenerational wealth transfer, generational wealth transfer or family wealth transfer, these are simply names for passing wealth from the people who currently manage it down to their children and grandchildren. The goal for many families is to see that wealth maintained far into the future. 

The Great Wealth Transfer is set to be the largest intergenerational wealth transfer in history. Over the next two decades, $68 trillion dollars is expected to move from Baby Boomers to their Gen X and Millennial children and grandchildren.1 Boomers now hold more than half of all wealth in the U.S. — compared to just 3% held by Millennials. It’s easy to see that this shift may create a major impact on Gen X and Millennial lives — and that a transfer of knowledge may also be required to help the inheriting generations manage their new-found wealth.

 

Generational wealth transfer strategies

When you consider how to transfer wealth to family, the steps you take may depend to some extent on individual heirs and their financial skills, comfort with wealth and other traits. After all, you aren’t simply transferring a large amount of money. You’re transferring an obligation and responsibility to shepherd that wealth so future generations can also benefit from it. 

Someone who has already proven to live responsibly with wealth may need less preparation for this responsibility than someone who has lived on a modest budget. But even someone experienced with managing wealth may benefit from additional guidance and knowledge. 

Family financial meetings can be a good place to not only discuss legacy plans, but also learn where each person is in terms of financial literacy. You can identify areas where you may need to help individuals build the skills needed to manage wealth confidently and competently. This could include anything from teaching basic budgeting to understanding economic indicators and how to track them, to advanced investing, estate planning and tax mitigation knowledge. 

  • Use this checklist to evaluate your heirs’ understanding of 12 fundamental financial skills so you can identify strengths and opportunities for improvement. 
  • Find additional tips for helping your heirs gain the confidence and insights needed to achieve your legacy goals. 


Your team of financial professionals can help with this education. For instance, one of our clients had us explain to heirs the mechanics of trusts — how they work, why they’re used, and what they can and can’t do. Working with your advisors also helps the family create relationships and build trust with the professionals, which can help smooth the actual transfer of wealth when the time comes.

Some families find it helpful to learn about each heir’s perspectives on wealth, as well as their financial priorities, risk tolerance and investment styles. Combined with skillsets, this may help you and your advisors determine specific family wealth transfer strategies, tools and tactics. For example, if an heir is not yet able to responsibly manage wealth, you might set up a trust to handle their inheritance. 

Other families may connect inheritance to specific requirements, which might also weave in family values. For instance, part of the generational wealth transfer could be contingent on the heir being gainfully employed. Or college costs might be reimbursed if an heir achieves a certain grade point.

 

What to do when a parent dies

By holding regular family finance meetings, working with your professional team, and making sure heirs have the skills they need, you put the next generation in a solid position for a smooth wealth transfer. Your heirs will understand family values and expectations for managing the family wealth. They’ll know where to find essential information, from asset inventories and insurance policies to account details and advisor contact information.

However, there are still important practical steps that family members should take when the wealth owner dies. While specifics may vary depending on the situation, the steps often include those listed below. You may want to start by calling a family meeting to review the list and assign responsibilities. 
  • Contact family members
  • Secure the property if it will sit empty; forward mail
  • Obtain a legal pronouncement of death from a medical professional
  • Make funeral arrangements according to the deceased’s wishes
  • Contact the person’s employer, business partners and/or employees
  • Share the news with close friends; you might find contact information in the deceased’s address book, email lists and mobile phone contacts
  • Request several copies of the death certificate from your state’s vital records office 
  • Locate estate and wealth transfer documents; locate all assets
  • Contact the executor, any trustees and your team of financial professionals
  • Contact financial account companies, such as banks, credit card issuers, loan holders, investment holders
  • Contact the Social Security Administration if the person was receiving benefits
  • File a life insurance claim if the deceased had a policy
  • Pay bills and cancel services; cancel the person’s driver’s license; close email and social media accounts

 

Preparation is key to the Great Generational Wealth Transfer

Passing on your wealth to future generations is a large responsibility. Taking time to prepare and plan can not only ease your own mind but may also reduce stress for your heirs when you pass away by providing valuable guidance during an emotional and difficult time. 

Your Hancock Whitney team can help you with many aspects of your generational wealth transfer, including assisting with financial education for your heirs and discussing strategies for achieving your family financial goals and legacy vision. Contact us for a personal consultation.

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1“3 Ways to Prepare Yourself for the Great Wealth Transfer,” Doone Rosin, Entrepreneur, posted Sept. 27, 2022, https://www.entrepreneur.com/money-finance/3-ways-to-prepare-yourself-for-the-great-wealth-transfer/434715,

“Strategies to Navigate the $68 Trillion ‘Great Wealth Transfer,’ According to Top-Ranked Advisors,” Jessica Dickler, CNBC, posted Oct. 17, 2022, https://www.cnbc.com/2022/10/17/how-to-navigate-the-great-wealth-transfer-according-to-top-advisors.html 


The information, views, opinions, and positions expressed by the author(s), presenter(s), and/or presented in the article are those of the author or individual who made the statement and do not necessarily reflect the policies, views, opinions, and positions of Hancock Whitney Bank. Hancock Whitney makes no representations as to the accuracy, completeness, timeliness, suitability, or validity of any information presented. 

This information is general in nature and is provided for educational purposes only. Information provided and statements made should not be relied on or interpreted as accounting, financial planning, investment, legal, or tax advice. Hancock Whitney Bank encourages you to consult a professional for advice applicable to your specific situation. 

Hancock Whitney Bank offers investment products, which may include asset management accounts, as part of its Wealth Management Services. Hancock Whitney Bank is a wholly owned subsidiary of Hancock Whitney Corporation.

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