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What can I do to protect my wealth during estate administration?

The will has been drafted, trusts have been established and everything is located in a safe and easy to find location -- what else is there to do? Most people in Oklahoma might leave their estate plan at that and then move on to other things in life. While having a plan certainly does create a much simpler estate administration process, it still might not be enough. For those with considerable net worth, a wealth transfer plan is exceptionally useful.

Even with official estate planning documents in place, family wealth does not last long once it begins to pass down the ranks. The second generation loses approximately 70 percent of inherited family wealth while third-generation heirs see a 90 percent loss. The drastic decrease in family wealth has been blamed on a few different factors, including what is sometimes referred to as Sudden Wealth Syndrome, when heirs either leave their job or begin to spend with abandon. Other factors are perhaps even more simple and can be boiled down to unsuccessful communication and a lack of understanding.

A wealth transfer plan aims to slow and even put an end to the drastic loss of family wealth between generations. This plan usually starts off by opening up lines of communication regarding financial goals and intentions to future heirs. Some even go so far as to introduce their heirs to their own financial adviser before disclosing the methods of transferring inheritances. Perhaps most importantly, heirs are usually encouraged to create their own estate plans, as doing so tends to better prepare them to accept future inheritances.

Of course a wealth transfer plan would be useless without an already established estate plan. Inheritances are usually passed on during the estate administration process as deemed by a will or a trust, and all of the communication and good intentions in the world cannot guarantee that assets will be transferred according to an individual's wishes without those important documents in place. Oklahoma residents who are eager to protect their family's wealth are usually well advised to establish their own estate plans early on in life.

Source: Forbes, "The Difference Between Having An Estate Plan And A Wealth Transfer Plan", Michael Chamberlain, July 18, 2016

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