Family Wealth Transfer Fundamentals

Remember Family Wealth Transfer is best suited for individuals who have completed the wealth accumulation phase of their lives and are ready to benefit from properly planned asset accumulation.

By now, we believe you understand the importance of wealth transfer planning. However, successful plans first require a basic understanding of the key planning documents and how Trusts can help you achieve your individual wealth management and transfer objectives.

The best way to begin Wealth Transfer planning is to make sure you have at least one of the three basic planning documents of Wealth Transfer: a Will, a Power of Attorney and a Revocable Trust. Of these documents, an up-to-date Will may be the most critical. While most people would benefit from having all three, the truth is that many individuals either do not have a Will at all or do not up-date existing one.

Will Basics
Most people know that a Will transfers your personal assets when you die. It also names an Executor to administer your Estate whilst establishing a guardian for your minor children. But what you may not know is that a Will is not the only instrument by which you dispose off all of your assets. Note that properties held in Trust will not pass under a Will.

Provide Protection
Astute wealth transfer plans do not limit themselves to simply transferring wealth. Your plan should also protect you and your family during your lifetime by including a Power of Attorney for property and health care. The former gives the person you name the power to deal with property held in your name if you become incapacitated while the latter may provide direction as to medical personnel, convey your wishes about life-sustaining treatment. The healthcare power of attorney may also may designate a friend or family member to speak for you if you cannot.

Incapacity or disability planning is also very important but often overlooked strategy that can minimize disruption to your health care and financial affairs should you suddenly become incapacitated. Unfortunately, many people think that incapacity or disability planning is useful only for the elderly or people with significant financial responsibilities.

A “Power of Attorney” however ceases to be effective once the person granting the power dies at which point a Will or Trust agreement can take effect. Make sure your beneficiaries know about these Estate Planning documents beforehand to ease the transition for them after your death.

Transferring Through Trust
The third key planning document is a Trust agreement. This is an extremely flexible instrument that can, for example, fund charitable endeavours and provide continuity of management for your business during your lifetime and across generations.

Setting up a Trust is not as complex as you might think particularly when you work with an experienced Estate Planning professional. Ask your professional to provide a simple summary to aid your review; check for basics such as distribution provisions, Trustee provisions and beneficiaries’ names.

By creating a Trust, you place your assets, wishes and the welfare of your family in the hands of your designated Trustee. A Trustee typically invests and distributes Trust assets; administers discretionary provisions of the Trust; and performs recordkeeping, accounting and Trust reporting.

Make sure your Trustee is a reputable organisation you can confidently trust with your property and who will endeavour to have a good relationship with your beneficiaries.

Keeping Up to Date
To successfully reach your Wealth Transfer planning objectives, we recommend that you first update your existing documents and beneficiary designations. Ensure you solicit competent, professional advice and analyze the effect of transfer taxes before making significant transfers to family members or friends.

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