How to plan for and protect your family’s assets and your future inheritance.
Question: My dad owns a successful machine shop that employs over 65 people. Even though he’s almost 73 years old, he continues to work and shows no signs of giving up control of the business. He has no college degree and started his business in his garage nearly 50 years ago. I have a master’s degree in business and finance and have been managing the business for my father for 20 years; however, he shows no interest in retiring and turning the family business over to me. If my dad lives another 20-plus years, I could find myself working for my son who is about to graduate college and join the family business. I believe that my generation is not only about to be skipped over, but my children, Millennials, will acquire all the wealth. What drives my dad’s generation, Baby Boomers, and prevents them from handing down business succession to their children, my Generation X?
Answer: The Boomer generation, those born between 1946 and 1964, is the most populous. Having worked so hard to build what they have makes it difficult to let go and allow their children and grandchildren the opportunity to step into their shoes. Boomers are often criticized for their consumerism, their focus on wealth and their belief in the myth of a fountain of youth. The fact is, Boomers have become the richest generation in history, are more physically fit and are far outliving their parents. It’s expected that with today’s medicine and science, many boomers will live another 25 years. Unlike their parents, boomers seem less focused on business succession and how they will pass down their wealth. They are busy earning it, reinvesting it, enjoying it and chasing youth by spending their wealth on facelifts, Botox, fitness centers and anti-aging potions.
Will Boomers’ wealth skip your generation?
Probably not, although it’s most likely the Millennials may soon become the richest generation ever. According to Cerulli Associates, worldwide asset management group, over $68 trillion will be handed down over the next 25 years by the Boomer generation.
Generation X is encouraged to direct energy on how to influence Boomers to create asset protection and business succession plans that will transfer their wealth to their beneficiaries without the need for lawyers and courts. Boomers are 50% less likely than their parents to have a will, trust or other form of estate planning. This means as much as $47 trillion could end up in the hands of attorneys, courts and state’s unclaimed property divisions rather than in the hands of beneficiaries.
Inheritances are like Christmas gifts. Without adequate estate planning, heirs may meet the Grinch who stole Christmas and encounter family wars, attorneys and courts to settle estate inheritances. Take time this holiday season to discuss with your family how to wrap the family business and other assets into the best gift ever by implementing effective estate planning.
Kristen M. Jackson is the founding partner of Jackson Law PA (407-363-9020). She is experienced in estate planning, real estate law, business and contract law. Her firm has earned an AV rating by Martindale-Hubbell signifying the highest level of professional excellence as obtained through opinions from members of the bar and judiciary.