Many high-net-worth individuals build their financial legacy to protect and care for their loved ones. Although wealth-holders are actively engaged in creating and maintaining their financial legacies, beneficiaries may not be so well informed and wealth management may not be a priority for them. Increasing financial literacy among the younger generation is a crucial part of a robust wealth-transfer plan.

To assist families in teaching sound financial practices, we employ a diverse team so that your offspring and other beneficiaries can find common ground with an advisor they trust. These discussions are sometimes complex and sensitive, and it can be beneficial to have a GMAG advisor who can add objectivity to the conversation between you and your family.

Beyond establishing a solid foundation of financial literacy within their families or for their children or heirs, what else can high-networth individuals do to safeguard their singular legacies?

Trusts can be an effective tool to protect your legacy and the wealth you have built until your beneficiaries are ready—by virtue of achieving a certain age, maintaining full-time employment, or meeting some other metric you control—to take on the responsibility of maintaining it. Until your beneficiaries are ready to be fiscally responsible, a trustee may control the disbursement of funds.

Trusts can also provide asset protection against outside parties. They can protect assets from creditors’ claims, from, or from being split up in the event of a divorce.

In addition to protecting your legacy, trusts may also have the benefit of reducing the taxes your beneficiaries will incur. At present, gift and estate taxes do not apply to the first $11.4 million in assets, but that number, as mandated by current tax law, is slated to diminish to approximately $5 million by 2026. Making a gift into a trust allows you to lock in the temporarily increased estate tax exemption and also removes any appreciation on those assets from your estate.

TESTAMENTARY TRUSTS can ensure that you keep your assets while you live. Your last will and testament may leave your assets in trust for your beneficiaries when you pass on rather than an outright bequest.

A GRANTOR TRUST may be right for you, if you’d like to start gifting now. As grantor, you pay any taxes that the trust generates, essentially creating a tax-free gift for your children and reducing your taxable estate.

A DYNASTY TRUST can allow you to keep assets within your own bloodline. You can specifically direct where you would like your money to go when you pass on. Assets in a dynasty trust can avoid estate taxes for multiple generations.

A trust can provide you with peace of mind by guaranteeing that your family is protected and that your legacy remains intact. Please feel free to reach out to us if you are interested in discussing the available options for your unique situation.

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