Robert Lucente
ABOUT Robert

Robert Lucente has been serving individuals and families to meet their retirement, estate, investment, and tax planning needs since 2006. Robert currently serves as an Investment Advisor Representative with Pure Financial Advisors, LLC where he works directly with clients to help them realize their specific financial objectives. Prior to joining Pure Financial Advisors, Robert served [...]

Wealth transfer planning is complicated, involving various factors like taxes, family dynamics, and financial goals. It requires careful navigation to ensure a smooth transition of assets. Pure’s Financial Advisor, Robert Lucente, CFP®, CFA® charter, guides you through essential steps to transfer your wealth to the next generation.

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Baby Boomers are anticipated to pass along more than $68 trillion dollars in what is being called “The Great Wealth Transfer1″ so having a plan is crucial in order to have a smooth transfer of wealth. Wealth Transfer has two primary methods: the first is gifting during one’s lifetime and the second is an inheritance at one’s passing.

Communication is at the core of a successful plan. Providing some insight to loved ones that you have a plan, they will be involved in the plan is key. You do not have to necessarily provide detailed information about the plan. But, sharing of high-level information like the structure of the plan, the method and/or timing of how an inheritance should be expected is all good practice. Also, loved ones who will play a specific role or duty such as trustee or Power of Attorney should be notified.

Generally speaking, its important to have documents such as a Will and/or a Trust outlining your wishes. Wills and Trusts can be drafted by an estate attorney and the cost will vary depending on the complexity of one’s estate and their wishes. It’s a good rule of thumb to revisit and review such documents once every 3-5 years or when any life changing events occur. Also don’t forget to include non-financial assets, investment accounts, bank accounts and real estate are typically the focus. However, non-monetary items need to be considered as well. Highly detailed accounting of one’s possessions and one’s wishes to inherit them can lead to less confusion among loved ones. Now, Iet’s cover a few of the most common wealth transfer strategies.

Annual Gift Tax Exclusion

The annual gift tax exclusion, for 2024, the IRS allows individuals to make gifts of up to $18,000 per year to an unlimited number of individuals, with no federal gift or estate tax consequences. A spouse can give the same amount—doubling the amount a couple can gift. For example, a husband and wife with 2 children could give away a total of $72,000 a year to them—$36,000 to each child—without any tax repercussions. And those gifts are made, that money is removed from their taxable estate.

Irrevocable Life Insurance Trusts

An Irrevocable Life Insurance Trusts or “ILITs” These are often viewed as attractive because the proceeds are inherited estate and income tax free.  The value of the death benefit is not considered part of the estate. Be aware, these are irrevocable, meaning in this case once the policy is in the trust, it cannot be moved out of the trust.

Grantor Retained Annuity Trust

The Grantor Retained Annuity Trust also known as a GRAT. This can be advantageous when you have an asset you expect to appreciate over time, don’t have a federal exemption left, or you are not comfortable transitioning a large asset yet. What can be valuable about the GRAT is any appreciation in asset from the day its placed in the trust to the day the GRAT is terminated is estate tax free. However, if one passes away during the pre-determined term of the trust, then all the assets in the trust will be included in the taxable estate.

Deciding on the best way to transfer your wealth can be complex, and there are a lot of moving parts to consider. If you would like help in determining what options to consider, please take advantage of our free financial assessment.

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• Investment Advisory and Financial Planning Services are offered through Pure Financial Advisors, LLC, a Registered Investment Advisor.

• Pure Financial Advisors LLC does not offer tax or legal advice. Consult with your tax advisor or attorney regarding specific situations.

• Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.

• Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.

• All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy.

• Intended for educational purposes only and are not intended as individualized advice or a guarantee that you will achieve a desired result. Before implementing any strategies discussed you should consult your tax and financial advisors.

CFP® – The CERTIFIED FINANCIAL PLANNER™ certification is by the Certified Financial Planner Board of Standards, Inc. To attain the right to use the CFP® designation, an individual must satisfactorily fulfill education, experience and ethics requirements as well as pass a comprehensive exam. Thirty hours of continuing education is required every two years to maintain the designation.

CFA® charter – Chartered Financial Analyst® Chartered Financial Analyst® designation was first introduced in 1963. The CFA Program contains three levels of curriculum, each with its own 6-hour exam. Candidates must meet enrollment requirements, self-attest to professional conduct, complete the approx. 900 hours of self-study, and successfully pass all three levels to use the designation.The program curriculum increases in complexity as you move through the three levels:
Level I: Focuses on a basic knowledge of the ten topic areas and simple analysis using investment tools
Level II: Emphasizes the application of investment tools and concepts with a focus on the valuation of all types of assets
Level III: Focuses on synthesizing all of the concepts and analytical methods in a variety of applications for effective portfolio management and wealth planning
CFA Institute does not endorse, promote, or warrant the accuracy or quality of Pure Financial Advisors. CFA® and Chartered Financial Analyst® are registered trademarks owned by CFA Institute.

Source 1: “Millennials May Inherit $68 Trillion: Here’s What to Know about Real Estate and Inheritance Taxes,” Motley Fool, May 2023. https://www.fool.com/the-ascent/taxes/articles/millennials-may-inherit-68-trillion-heres-what-to-know-about-estate-and-inheritance-taxes/. [Date last accessed: May 7, 2024]