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How should affluent families control the value of their legacy over generations?

Everyone possesses two kinds of wealth. Personal wealth consists of your income, assets, and earnings-which creates the lifetime financial plan to achieve your personal goals. Social wealth is that part of what you earn over your lifetime that goes to the common good-which most people abdicate to the government's financial plan.

Like most families, you have strong ideas about controlling the legacy of your personal wealth. But you probably don't realize that you can also control the legacy your social wealth achieves in your name. You take control by managing three components of comprehensive, integrated wealth transfer planning. . .

Reassign or reduce value of assets to control the value of the taxable estate.
Manage the distribution of your assets during lifetime and after death to control the direction of the legacy.
Leverage payment method to discharge tax liability at the lowest cost.
Questions affluent families should ask to control their legacy.

1. Do you understand how the government will value and collect its share of your legacy? Are you satisfied to also let government control how this legacy is spent?

2. Are you relying on your Will to make sure your assets will be transferred at the time and in a manner that matches your goals with the needs of your heirs?

3. How will you handle the particular tax problems that apply to retirement assets?

4. How will you prepare your children to inherit unearned wealth?

5. You have completed a Will, but has your planning missed opportunities to control personal and social wealth by not also considering . . .

  • Durable power of attorney? Durable power of attorney for health care?
  • Living Will? Revocable Living Trust?
  • Marital, family, and children's trusts? Qualified Terminal Interest Trust?
  • Annual exclusion gifts? Gifts of the available exemption equivalent? Gifts requiring payment of gift tax?
  • Charitable Remainder Trust? Charitable Lead Trust?
  • Testamentary charitable planning for Income in Respect of a Decedent?
  • Family foundations? Family Partnerships?
  • Grantor Retained Interest Trusts? Grantor Retained Annuity Trusts? Grantor
  • Retained Unitrusts?
  • Private Annuities? Dynasty Trusts? Qualified Domestic Trusts?