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Are You Prepared for the Great Wealth Transfer?

Are you aware of and/or prepared for the “Great Wealth Transfer?”  What is the Great Wealth Transfer and how will this affect tax and estate planning in the months and years to come?

The “baby boomers” (those born between 1946 and 1964) represent a substantial portion of the US population.  Those who are in their late 50’s to early 70’s are giving serious consideration to their retirement and the impact this will have upon tax and estate planning decisions going forward.

Roughly 10,000 baby boomers turn 65 every day here in the US.  It is estimated that almost $60 Trillion of wealth will pass to the children, heirs and beneficiaries of baby boomers in the coming years.

Are you prepared for the Great Wealth Transfer?  The transfer of wealth will occur regardless of the tax and estate planning of this generation.  The question isn’t whether the transfer will take place, but how much of this wealth will be needlessly surrendered to tax authorities and probate expenses along the way.

How should you start planning for the Great Wealth transfer?  Are you all set if you already have an estate plan?

Those who already have established trusts or an estate plan should have it reviewed every 2 to 3 years.  Things change.  Laws change.  Taxation changes.  It is important to maintain existing trust and estate planning to make sure it protects your intentions and efficiently accomplishes your directives.

Tax and estate planning isn’t for the “wealthy.”  Anyone who owns a home in Southern California needs to have an estate plan.

It is important to understand the cost of probate is based upon an assets present value, not it’s equity

The average value of a home in greater San Diego is presently $704,000.  Without an effective estate plan a home must pass through probate before passing equity or ownership to your heirs and beneficiaries.  .  In this example of a $700,000 home, probate fees will be based upon $700,000 regardless of whether the home is owned free and clear or if it only has an equity of $100,000.  Typically the cost for probate, attorneys fees and executors fees on a $700,000 estate would be approximately $35,000.

It is also important to note the process of probate in San Diego in this example could easily take a year or more to complete.  This means the house would be tied up until the completion of the probate process.

The cost of an effective estate plan in this example would in all likelihood be less than 10% of the $35,000 probate cost.  An effective estate planning strategy would avoid probate altogether, immediately saving $35,000 in real dollars, while allowing assets to immediately transfer to your intended beneficiaries.  A small investment of time and expense will preserve a substantial portion of your assets while removing many of the burdens and hassles of surviving heirs.

Are you prepared for the Great Wealth Transfer?  Is it time to review your existing tax and estate planning? We invite you to contact Allen Barron or call today for a free consultation at 866-631-3470.