Passing Generational Wealth: 7 Ways To Make Sure Your Assets Go Where You Want (2024)

Planning for the future can feel like a daunting task, especially when it comes to where your money should go. You want to ensure your loved ones will be taken care of long after you’re gone, but knowing which steps to take can feel like a slippery slope. Still, it’s not something you should hesitate on, experts say.

“I’ve seen too many families torn apart after the death of a loved one because they didn’t have a proper plan in place for their assets and wealth,” said Andrew Pickett, lead trial attorney and founder at Andrew Pickett Law. “Almost every time, the cause of this is a lack of understanding about ensuring that their assets are passed on according to their wishes.”

Here are some ways to make sure your wealth actually goes where you want.

Create a Will

There are several ways to make sure your money and other assets go to yourchosen beneficiaries after you die, Pickett said.

“The most crucial step is ensuring that you have a valid will that clearly states your intentions,” he explained. “A will is a legally binding document that outlines how you want your assets to be distributed after you pass away.”

Without a will, he said, the court will distribute your assets according to state law, which may not align with your true wishes.

He added, “It’s also important to regularly review and update your will as your life circ*mstances change, such as getting married, divorced or having children.”

Carter Seuthe, finance expert and CEO of Credit Summit, said his top advice for ensuring your assets go to your chosen beneficiaries would be to draft a will with the help of a qualified estate lawyer.

“This can offer some peace of mind especially in more complicated situations,” he said, “and allows you to clearly outline where you would like your assets to go.”

Set Up a Trust

​​Another way to ensure that your assets are passed on according to your wishes is by setting up a trust.

As Pickett explained, “A trust is a legal arrangement where a trustee manages the assets to benefit the beneficiaries.”

By setting up a trust, he said, you have more control over how and when your beneficiaries will receive their inheritance.“This is especially beneficial if you have minor children or heirs with special needs.”

John J. Kostic, finance expert and CFP at Beacon Wealth Team, said a trust performs a similar function as a will except that the activities of the trust are private (not public record like a will) and do not have to be certified by a court in a process known as probate.

Choose a Trustworthy Trustee

In the case when the children are minors or not trusted to be fiscally responsible, an irrevocable trust may be the answer, said Asher Rogovy, chief investment officer of Magnifina. However, he said there are some very important mistakes to avoid when establishing a trust.

“It’s imperative that the trust’s grantor select a very responsible trustee,” he warned. “Trustees can have a lot of discretion with how the trust is managed, andmismanagement can squander hard-earned generational wealth.”

He added that it’s equally critical that the trustee selects a competent investment manager with a reasonable fee.

Include Clauses

According to Travis Christiansen, attorney and owner of Boyack Christiansen Legal Solutions, you also can include a clause in your will stating that if any of the heirs fight the distribution they lose their inheritance.

“This may help to cut down on disputes,” he said. “Many accounts with various financial institutions, such as mutual fund account life insurance and annuities, have options where you can select the beneficiary and, in some cases, determine ahead of time the timeframe for the money to be paid over.”

As an example, he said, you could instruct a life insurance company to pay the death benefit out over a 10-year period for an annuity.“You can have every asset listed in a will with clear instructions on its distribution.”

Along with clear legal documentation, Christiansen added, you can create a video and/or audio recording explaining your wishes so any dispute is easily quashed.

“Some people chose to give letters they have written during their life to their heirs after their death explaining the distribution,” he noted. “Some people also chose to inform their heirs before they die so everyone knows how everything will be distributed.”

Use Life Insurance for Estate Planning

According to Julia Kelly, managing partner of Rigits, one uncommon yet highly effective way to pass on wealth is the utilization of a life insurance policy.

“By designating specific beneficiaries in the policy,” she said, “individuals can bypass probate and ensure prompt distribution of funds directly to their loved ones upon death.”

She said some even opt for irrevocable life insurance trusts (ILITs), which offer additional protection and control over the policy proceeds while potentially reducing estate taxes.

Put Your Home in a Trust

“As a Realtor, I see too many people lose generational wealth because they didn’t set up their assets correctly,” said Sammy Lyon, associate broker at Dow Capital. “The No. 1 thing you can do is put your home in a trust.”

According to Lyon, even if you have a will, you need a trust to avoid probate, which will suck the remaining assets with court fees and a long, drawn-out legal processthat is public record.

“With a trust, everything can be handled privately,” he said, “and, though you have theupfront cost of creating it, you save the back-end cost of statutory probate fees — not to mention any family fighting. The probate sales on the market should have stayed in the family, not sold for cheap.”

Regularly Review Documents

Jake Hill, finance expert and CEO of DebtHammer, said the easiest way to ensure that your money and other assets are handled as desired is to keep your estate planning documentation up to date.

For example, regularly reviewing your will for any errors or necessary updatesensures your wishes are properly documented.

Hill said, “The same is true for beneficiary designation forms, which are often overlooked.”

He pointed out that this type of form is especially important for investment accounts or life insurance policies and should be reviewed at least annually.

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