Estate Planning Essentials to Preserve Your Generational Wealth

Allworth advisor Laurie Ingwersen, CFP^®, CRPC^®, CDFA^®, CBC^®, CEPA^®, covers essential steps for estate planning to help you preserve and protect your wealth for future generations.

 

For many families, building and preserving wealth is about more than just financial security—it’s about creating a legacy that lasts. We work hard to provide for our loved ones, and part of that legacy is ensuring our assets support future generations. While growing wealth is important, planning for its careful transfer is equally essential.

Here are some foundational estate planning steps to help you protect your wealth and pass it down smoothly to the next generation.

1. Create or Update Your Will Regularly

A will is the cornerstone of most estate plans. It’s where you clearly outline how you want your assets distributed, and it can prevent misunderstandings among heirs. Without a will, the state decides on your behalf, which may not reflect your wishes.

If you already have a will, consider reviewing it after major life changes, like a marriage, divorce, or the birth of a child. This way, your will always aligns with your current wishes.

2. Establish a Trust for Greater Flexibility

While a will specifies your intentions, it may not offer the flexibility or control a trust can provide. Trusts are useful if you’d like assets distributed according to certain conditions or at specific times. For example, if you have young children or grandchildren, a trust can ensure they receive support when they reach an age you’re comfortable with.

A trust can also help keep your estate private and out of probate court. By setting one up, you gain a higher level of control over how and when your wealth is passed along.

3. Designate Beneficiaries on Your Accounts

Many financial accounts—like retirement accounts and life insurance—allow you to add beneficiaries directly. Doing this bypasses probate and speeds up the process of transferring assets.

It’s wise to periodically check your beneficiary designations, especially after a major life change. This simple step ensures that the people you intend to benefit from these accounts actually do.

4. Explore Gifting Options to Reduce Taxable Estate Value

In some cases, gifting assets to family members during your lifetime can reduce the size of your estate and the associated tax burden. For instance, you can take advantage of the annual gift tax exclusion, which allows you to gift up to a certain amount per person per year tax-free.

This approach lets you see your loved ones benefit from their inheritance sooner while helping manage potential estate taxes later on.

5. Prepare for Estate Taxes

If your estate is sizeable, estate taxes may become a concern. Proper planning can help reduce these taxes, allowing more of your assets to pass on to loved ones. Some tools to consider are trusts, charitable donations, or even life insurance.

For example, some people use irrevocable life insurance trusts (ILITs) to keep life insurance proceeds out of their taxable estate, providing tax-free funds to heirs. Working with an advisor can help you explore these options and determine the best approach for your situation.

6. Make Financial and Health Directives

Estate planning isn’t only about passing down assets; it’s about preparing for the unexpected. Setting up a durable power of attorney for finances and healthcare, along with a healthcare directive, ensures your wishes are honored if you’re unable to make decisions yourself.

These documents let you appoint someone you trust to make financial or medical choices on your behalf, giving you and your family peace of mind.

7. Communicate Your Plans with Your Family

Estate planning conversations can be sensitive, but open communication with your family can help prevent misunderstandings. You don’t need to go into every detail, but sharing an overview of your wishes can minimize surprises and avoid conflict.

This conversation also gives loved ones a chance to ask questions, understand your intentions, and feel confident in the plan you’ve set in place.

Taking Action on Your Estate Plan

Estate planning is about protecting what you’ve worked hard to build and passing it down in a way that reflects your values. By taking these proactive steps, you can help safeguard your family’s future and create a legacy that endures.

If you’re ready to begin or revisit your estate plan, I’m here to help guide you. Together, we can build a plan that ensures your wealth will benefit the people and causes you care about most.

Laurie Ingwersen, CFP®, CRPC^®, CDFA^®, CBC^®, CEPA^®

Partner Advisor

My father was a financial advisor who introduced me to the impact proactive planning can have on people’s lives at a very early age. At the same time, I also watched my mother struggle to make the right, forward-focused decisions after divorce—which ultimately led her to a life of financial insecurity. Forever moved by the sacrifices she made for us, I want to honor her by helping others avoid some of the mistakes she made. Now as a passionate financial professional myself, I strive to help others make sound financial decisions that expertly balance their priorities today and their future needs.

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