Jun 9th, 2013 | By | Category: Senior Finances

Trillions Bequeathed to Survivors

The consulting firm, Accenture, projects retirees will leave over $30trillion to their offspring over the next 30-40 years. That’s a lot of money, and Baby Boomers need to be thinking about how they want to divide their assets. The considerations are important because your assets are part of your legacy, and most of us in retirement want that to be as positive as possible.

Editors at SCJ have had personal experience as beneficiaries of parental assets over the past 30 years. Here is what they have learned:

  • Talk with your family members who will be the recipients of your estate and tell them what your plans are. Share documents (wills, trusts, etc) with them and be sure they understand what you have in place. More important, be sure they understand it’s your estate and you are making the decisions. Your wishes are the only thing that matter; your offspring/beneficiaries do not get a vote.
  • Regarding choices, you can divide the assets equally, or not. But if you don’t, be aware there will likely be hard feelings among those who receive less. If you have a rationale for this choice, we suggest you share that rationale with your adult children. They don’t get a vote, but many times it is helpful to them to understand why you have made the choices you have made. A recent multi-million dollar lottery winner in Florida reportedly is splitting her winnings with one of her offspring; she is not including her other adult sons and daughters. She certainly has a reason for doing so, and everyone in her family may understand. And they may not. Someone in that situation needs to be clear about her choices, if she cares about her legacy.
  • If your assets are significant enough, consider creating a trust with your offspring being the beneficiaries. You (and your spouse/partner) manage the trust as trustees, and you put all your assets in the name of the trust; that is, the trust owns all your assets, and they are divided when you specify. That can be either upon your death, or over a period of time following your death. It’s up to you. Trusts are a very straightforward way for you to be sure your wishes will be followed after your demise.
  • An important part of your legacy may be notes or letters you write to your survivors and leave for them. Many friends report how important and significant such correspondence is for them; in many cases, they treasure those notes more than money.
  • If you want specific items to go to specific survivors, make a list and leave several copies with those involved. Again, your offspring don’t get a vote; but they do need to know your wishes and be clear about what goes to whom so quarreling over ownership can be avoided.
  • If you want your survivors to divide up the items themselves, tell them. And suggest a way to do that. A great aunt told her nieces to divide up her belongings (mostly antiques from previous generations) after she was gone, and told them to draw names in the order they would make their choices. They just continued to take turns choosing, one item at a time, until everything was divided. That methodology has subsequently been used by many members of that family over the intervening years.

All seniors need to be clear about what kind of legacy they want to leave while their minds are still clear. A multitude of family dissension will be averted if you follow through on this advice for senior finance.

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