There is a national conversation in the air around the Great Wealth Transfer, and it is such an honor (and so fascinating) to learn from families how they are making moves now to ensure the Next Generation is taken care of. And for most, that means saving, but for some, that means sharing.
The WSJ article “Forget the Inheritance. These Readers Are Passing Down Their Money Now.” by Rachel Louise Ensign shows a different path from the conventional wisdom. And while many will compare it to their own situation, I think the Why (not the How Much…money is the outcome, not the goal) behind this counterpoint is the key learning. To wit:
“But many affluent baby boomers told us they are regularly giving their kids and grandkids smaller financial gifts now, while they’re still around to watch younger generations enjoy it. It’s not enough to show up in the big-picture wealth data, but it still makes a meaningful difference in the lives of the recipients. The great wealth transfer might be on hold, but the great wealth trickle is well under way.”
The Great Wealth Trickle is great framing. Families can help themselves today while preparing for tomorrow. This takes planning, paperwork, and process so that the estate is organized. Once / As that is done, we can look at the current state and facts on the ground to understand where the estate can be optimized to make or save the family more money. According to the article, some of the ways Mom and Dad are helping include:
- School for the grandkids
- Money for the next generation
- Housing help
- Traveling with your parents
There are so many ways the family can help themselves. But how are these gifts being accounted for in the estate, especially with more than one child, to ensure equality? Who is helping ensure all parties to the estate, both the professionals as well as family, have a common knowledge of the facts? What about understanding the economics of an intra-family bank? Who is helping the family have these conversations? Together, we can move our families, forward…