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How to Practice Proper Legacy and Estate Planning

How to Practice Proper Legacy and Estate Planning Bulman Wealth

Transferring wealth to your family can be a complex process, and it is important to be aware of the risks and challenges involved. A significant number of wealthy families lose their wealth by the third generation, and therefore, it is essential to know the risks that affect wealthy retirees and have strategies in place to maintain the wealth within your family.[1] However, wealth transfer is not only relevant for the wealthy, but it is also something that everyone with something to pass down to the next generation should consider.

Communication: The Bedrock for Successful Wealth Transfer

Effective communication is crucial in the wealth transfer process.[2] While it may be difficult to have conversations about wills and other arrangements, it is essential to ensure that your family understands what will happen to your assets when you are gone. If your beneficiaries are aware of your will and can discuss it with you while you are alive, this can help to unite your family and preserve the money that you have worked hard to provide for them.

It can also be useful to have a dialogue with your family about how to manage the wealth that you will transfer to them.[3] A significant number of adults in the US reported that their parents did not provide them with money lessons when they were children, highlighting the need for more open and honest communication about financial matters within families.[4]

Discussing money, even outside the family, is often taboo in America, but it is important to be transparent with your family about your financial situation. If you have experience and expertise in investments and wealth management, it is crucial to provide support and education to your family members who may not have as much knowledge in these areas. Factors such as inflation and taxes can significantly impact long-term wealth, and it is essential to educate other generations in your family about these issues.[5]

Estate Planning and The Tool of the Trust

One tool that can be helpful in managing your wealth after you are gone is a trust. A trust is a legal vehicle that grants a trustee (either an individual or a company) the power to distribute and manage your wealth.[6] Trusts can offer tax advantages and financial protections for your money, and they can also be used to ensure that your wealth is managed by an objective and unbiased third party rather than an individual family member.[7] This can help to preserve what you leave for your family and future generations.[8]

To summarize, it is essential to have a clear plan in place for transferring wealth to your family. Effective communication and the use of trusts can be valuable in managing this process and ensuring that your family is set up for long-term financial success. If you require guidance on how to manage your funds and create a long-term plan for your family, you can reach out to us for a complimentary review of your financial plan.

All content is for information purposes only. It is not intended to provide any tax or legal advice or provide the basis for any financial decisions. Nor is it intended to be a projection of current or future performance or an indication of future results.

Opinions expressed herein are solely those of Chris Bulman Inc. dba Bulman Wealth Group and our editorial staff. The information contained in this material has been derived from sources believed to be reliable but is not guaranteed as to accuracy and completeness and does not purport to be a complete analysis of the materials discussed. All information and ideas should be discussed in detail with your individual advisor prior to implementation. Investment advisory services are offered through Chris Bulman Inc dba Bulman Wealth Group, an SEC Registered Investment Advisor. Insurance products and services are offered through Chris Bulman, Inc. dba BWG Insurance Agency and Ameritas Life Insurance Corp., CA State Insurance License # 0M46922. Being registered as an investment advisor does not imply a certain level of skill or training.

Bulman Wealth Group, BWG Insurance Agency and Ameritas Life Insurance Corp. are not affiliated with or endorsed by the Social Security Administration or any other government agency.

Any statements or opinions expressed should in no way be construed or interpreted as a solicitation to sell, or offer to sell, advisory services to any residents of any State other than the States where otherwise legally permitted.

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Purchases are subject to suitability. This requires a review of an investor’s objective, risk tolerance, and time horizons. Investing always involves risk and possible loss of capital.

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