Passing on your legacy is often a deeply personal endeavor, and planning is crucial to ensure that your financial goals and wishes are carried out effectively. If you plan to pass on your assets such as your business, start with an open communication with your heirs regarding your work values, principles, strategies, and philanthropic intentions. This would prepare and equip them as they take on the major roles in running the business. Develop a wealth distribution plan to protect your assets from potential threats and to have peace of mind knowing that your wealth will be secured for your loved ones.
A wealth distribution plan may include strategies such as donations to heirs, transfer to heirs, and life insurance with investment. Each of these strategies has its own set of advantages and disadvantages and should be studied carefully before they are implemented.
1. Donate to heirs. This is one of the most common forms of wealth transfer planning. This involves transferring cash, properties, stocks, and business assets to your heir during your lifetime through a will or trust. If you choose to do it in the form of a will, know that assets are typically bequeathed to the heir upon the death of the donor. If you decide to do it through a trust, on the other hand, assets can be transferred to the heir before the death of the donor. Trusts can provide more control over how the assets are distributed and can offer additional benefits like asset protection and estate tax planning. Additionally, when you decide to donate it to your heirs, you can leave a portion of your wealth to charitable organizations, supporting causes that are important to your family.
2. Transfer to heirs. Consider using this method of wealth distribution to make sure your investments and other assets are in excellent hands. This involves transferring your assets to your heirs before passing away for a more seamless transition of ownership. By doing this, you would spare your heirs and beneficiaries from having to pay the entire estate tax. Additionally, you would save them from the hassle of the costly and complex process of inheriting your wealth.
3. Life insurance with investment. Another option that you should consider when passing on your wealth is getting life insurance with an investment component as soon as you can. While it is great that you have a steady business to support your loved ones, giving them financial security in the form of insurance should also be your priority. Life insurance can be used to cover funeral expenses, pay off debts, and provide a source of income for your heirs. You can also access a variety of global investment opportunities that you can use as a living benefit for your retirement or as an additional business fund. With this, you have the opportunity to grow your wealth over time before transferring it to your heirs.
By choosing this type of wealth protection, you will also help ensure that your heirs receive their inheritance. With AXA’s Asset Master, you can acquire all these benefits and worry less about protecting your business while starting your estate planning.
As you come near your retirement, make it a priority to have a well-structured wealth protection plan that is tailored to your specific needs and goals. By doing so, you can enjoy life more and focus on your personal well-being in your golden years.
Know you can game plan your efficient wealth transfer today with the help of AXA’s Asset Master. For more information, contact an AXA financial advisor today.