Wealth Preservation Strategies

Building Your Legacy With Wealth Preservation Strategies

By Travis Anderson, Managing Partner of TBH Advisors

The desire to preserve wealth and create a lasting legacy is more prominent than ever, with $84 trillion expected to be transferred through estates between 2021 and 2045. For many families, this raises questions on how to manage spending, navigate unforeseen events, and guarantee that their wealth serves as a benefit rather than a burden for future generations.

At TBH Advisors, we believe that proactive and strategic planning is an essential component of wealth preservation. With the right strategy in place, you can better protect your wealth and provide for the people and causes that matter most to you.


Wealth Preservation Strategy #1: Have Early Conversations  

It’s beneficial to have open discussions around wealth, goals, and legal documents while all parties are living. It may seem straightforward, but the interpretation of a will following the death of a loved one can often lead to familial tension and conflict. In many cases, the main challenge isn’t disclosing the existence of wealth, which may be multiple homes or significant assets, but rather clarifying its intended use for the next generation.

It’s critical to set expectations for how your wealth will be used to avoid missteps down the line. Deciding whether to have these conversations while the family is older or younger is subjective, but the goal should remain the same: to ensure that wealth fosters responsibility, not entitlement, and is spent as intended. 


Wealth Preservation Strategy #2: Capitalize on Legislative Changes

There are new wealth preservation opportunities for individuals to take advantage of within the Secure 2.0 Act. We previously discussed the value of early saving for education, but understand that 529 plans are not always utilized. Now, with the newest legislative changes, unused funds in a 529 plan can be rolled over into a Roth IRA. This allows families to pass down funds with tax-free growth. The beneficiary can even be changed, allowing it to be inherited by a different family member. This shift not only preserves the wealth that has been saved up, but also offers flexibility to best align with personal and familial plans, while also avoiding unanticipated penalties.


Wealth Preservation Strategy #3: Utilize Trusts To Safeguard Assets

Trusts can also be utilized to ensure certain assets span across generations. By placing select assets into trusts, families can protect their wealth from potential future liabilities and ensure that their estate plan accurately reflects their wishes. For example, a Spousal Lifetime Access Trust (SLAT) is particularly useful in scenarios like second marriages, because they allow for the provision of funds to a spouse without incurring tax liabilities.

It’s important to note that each state has a unique trust code. At TBH Advisors, we have a depth of knowledge on Tennessee trust laws and can aid you in understanding the nuances. 


How We Can Help

We understand that wealth preservation requires more than just understanding legal documents or managing investments. It involves a personal and comprehensive approach. It’s essential to revisit documents frequently, have consistent communication with your financial advisor and family members, and understand legal opportunities now, so that future generations are prepared and responsible to uphold your legacy. At TBH Advisors, we’re here to help you along the way so your wealth is preserved for generations to come. Contact us to discuss your unique plan for wealth preservation.

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