Retirement Roadmap

Is Your Family Ready For The Great Wealth Transfer?

• Mark Fricks • Season 3 • Episode 28

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As trillions of dollars shift hands over the next two decades, the question isn’t whether your wealth will transfer — it’s how. In this episode of Retirement Roadmap, Mark and Evan break down The Great Wealth Transfer—the unprecedented movement of assets from today’s retirees to their heirs—and show how to turn this generational shift into a thoughtful, tax-efficient family strategy.

Drawing from decades of real-world advisory experience, Mark and Evan explain why successful wealth transfers require more than a will or a trust. They unpack the key differences between estate distribution and beneficiary coordination, how taxes and timing can dramatically impact what your heirs receive, and the family conversations that prevent conflict before it starts. You’ll learn practical steps for reviewing beneficiary designations, reducing lifetime taxes through Roth conversions, protecting heirs with trust planning, and aligning your estate documents with your broader retirement goals.

The reality is sobering: poor coordination can lead to avoidable taxes, delays, and disputes that undermine decades of careful saving. Mark and Evan share the most common pitfalls they see—out-of-date documents, mismatched beneficiaries, and missed opportunities for tax-smart wealth transfer—along with a clear roadmap for keeping your plan current as laws and life evolve.

The takeaway? Don’t let your legacy be decided by chance. With proactive planning and open communication, you can preserve more of what you’ve built and ensure it’s passed on with purpose.

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Advisory services offered through MasterPlan Retirement Consultants, Inc., a Registered Investment Advisor in the state of Georgia. Insurance, tax and commodities services offered through Fricks and Associates, Inc. dba MasterPlan Retirement Consultants. The aforementioned are affiliated companies.

SPEAKER_01:

Is your family ready for the Great Wealth Transfer? Hey folks, welcome back to Retirement Roadmap and thank you for joining us. My name is Evan, and with me as always, retirement planner Mark Fricks. The Silver Tsunami is here. During this episode, we're going to discuss the Great Wealth Transfer and how you can better ensure your own assets end up with the people you care about. Mark, legacy and estate planning is a huge aspect of what we discuss every day with clients.

SPEAKER_00:

It is. It is such an important part of what we do. Not only making sure you maintain control of your stuff while you're alive, need care, things of that nature, but the big part is transferring of the wealth. Not that big of a deal, as you know, from spouse to spouse. That's pretty cut and dried. I don't want to say it's a done deal, but it's pretty cut and dried. But definitely the next generation and generations beyond. There's so many things that could be done to make that more effective, avoid cost, avoid taxes, avoid probate, but more importantly, just making sure what you want to happen happens. Right.

SPEAKER_01:

So since around 2011, I believe, the baby boomers have begun to retire and they have begun transferring and pass away. They've begun transferring some of their wealth to the younger generation. So let me give you a number here. The great wealth transfer is underway with about 84 trillion expected to move from baby boomers to Gen X and millennials over the next two decades. We already know from talking to clients, talking to prospects, most, if not many, families are unprepared. The cultural divide, especially between generations, adds complexity to preserving legacies.

SPEAKER_00:

Yeah, and so there's not enough conversation. Let's just keep it simple. So many of our clients, and especially the ones that are the the uh early baby boomers and and older, just are very secretive. Uh I'm not saying all of them, but many of them are very secretive about what they have, uh where it's at, things like that. Hey, we I got things taken care of, we're good, or whatever. And many times these folks are in their 80s and 90s and they think they've got things taken care of, but they don't really understand the new stuff. They don't understand the fact that their their trust or will is 25 years old, language has changed, or whatever. And and so I don't I'm not sure how to break through that. Um some of them may be a trust factor, and you know, some kids you might trust more than others, others you trust them all, but there's still there's just this a little bit of a gap there, and I'm not sure how to break through that. It's not something you can just force somebody to do for sure.

SPEAKER_01:

Well, we've got some points to go over today that will give some folks some ideas because you're 100% right. There is a cultural divide between those generations, and the same financially or even politically. You know, a lot of po at one point when I was a kid, I knew that talking about politics was rude, right? You don't bring up, you don't ask about politics or religion, but now it seems to be a lot more free-flowing, people are more willing to discuss that. There's not as much taboo, and especially with finances. Uh so here's uh another study that shows 70% of families lose inherited wealth by the second generation, and over 90% by the third. This is known as the third generation curse, apparently.

SPEAKER_00:

Yeah, that's that's a big number, but it doesn't really surprise me because again, it's it's a matter of um uh you know, the younger generations, again, we're we're not trying to be too generalized uh generalized here, but the younger generations tend to have a different uh um view of money. I mean, I read recently where so many uh younger people really are just quitting their jobs and just traveling and things like that, which is great, but it you know, they're sacrificing future retirement, things like that. Maybe they're trying to use up some of their parents' money. I mean, I I wish a lot of these uh parents or grandparents would go ahead and give some of their money away while the kids are still around with the parents so they can watch them enjoy it. Teach them and engage them. And teach them how to spend it as well. But it's so it's so many layers to this, it's so complex that um you know, we could probably do four shows on this, but uh one thing we love to do, and you may get into this later, is to try to have family meetings. So once we've completed the planning process with the the parents, um let's bring the kids in. Let's let's uh especially if they're a trustee or something, but all of them that that are involved in in the next generation and even past that. And and let's be open, let's also talk about why we've done what we've done. Some uh some of our clients will say you can say this much, but don't tell them about that, and that's fine. Um but let's let's get an open open conversation. I had an advisor I knew several years ago. He would do retreats. And he would take these families away to like a retreat in North Georgia or somewhere, and they would spend the weekend together and getting to know um the the the complexities of the family. He would interact with them and and say, Yeah, I see this happening. The kids could be open and honest, the parents could be open and honest, but also have a good time too. And so I that may be something we might want to look at. I feel like you would need a psychiatrist to come along on that trip, too. I thought we were psychiatrists, actually.

SPEAKER_01:

So at least counselors. So I I think that's the overall point is to beat the odds, families need more than planning. They need multi-generational engagement built on understanding of the generational differences, and really, like everything else that we preach on this channel, early preparation is key. Teaching financial literacy to children and gradually sharing wealth planning details as they grow strengthens the odds of lasting wealth. So I want to discuss that. Um planning on the same page. A three-part plan is essential, and we've broken it down to these three parts. One, a lifetime financial plan, which is what we do every day. Um, a break the glass emergency plan. Something comes up, you never know. Rather than just blowing all your money incorrectly, you have a plan on how to handle those kind of expenses, and then a legacy plan for future generations. And it's critical that your families involve the younger generations in the process. Otherwise, 70% of heirs switch advisors after inheriting wealth, often due to weak relationships with the firms. That speaks to your point earlier. If you don't have a relationship with your advisor, especially if um there is a general uh generational difference, you see your parents' generation advisor of this sort of concept of money, or maybe uptight, or I don't uh he's old school. Old style, high I retire. And if you do something like we do, we're holistic planning. We're so much more than just where are you keeping your money. There's a plan in place. And if your gener the next generation doesn't know what that plan is and have not been let into this is how this works and how it's set up, then it's almost useless.

SPEAKER_00:

Well, I mean we're also very family-oriented. Uh, you know, we we we talk to our clients about being part of the master plan family. We want to get to know one of the first things our clients fill out when they become clients is information about their children, their grandchildren, uh, their likes, the family likes, um, activities, clubs they belong to, things like that. Even even their favorite food and favorite holiday and things like that. Would that ever come into being? Maybe not, but maybe so as well. So as much information as they can share is great. Um, you know, I I I hate it when, and it does not happen very often. Uh, and it's typically clients that have not have not been, I don't know, have been less connected to us, um, that I get a call from one of the kids. Uh I understand you're my dad's advisor. He passed away three months ago. I need to talk to you, as opposed to getting a call the next day, because we are closer to that family, we are closer to their situation. We've we've talked about, hey, my son's going through this, my daughter's going through that. Um we've spent you know time with them and and in talking about that situation. So it's just it's trying to make that connection with all of our clients. Can we do it with everybody? No, but it really benefits the client, is what it really does. Like you, um just like the stats you gave, let's let's pull that together and let's try to have something that goes beyond many generations.

SPEAKER_01:

And again, with with maintaining that relationship with the advisor, generations are looking for different things than their parents were. So the wealth management industry is shifting away from the product-driven models, which you know we preach that all all the time. It's shifting away from product-driven models towards holistic fiduciary-based services, which is what we do, but that's what the younger generations are increasingly expecting. So now 52% of the younger generation expect the holistic fiduciary model. In 2018, it was only 29%. So that's a pretty rapid increase over those years.

SPEAKER_00:

And that's amazing, especially when you when you uh understand what's happening over the last few years when it comes to robo advising. Uh, you know, I think I think a lot of the younger folks kind of tried that, but you know, there's just no connection there. You've got a computer saying this is where you should be, this is uh how what happens if somebody passes away? What happens if you have a a problem, you need extra money? Do you go to the robo advisor and say, how much money should I take out? And when it's just uh, you know, I hope I think the way I'm saying this is not perfect, but it's just a disconnect. It's the inhuman effect. It's almost like saying, I want to start going to a doctor that's a robot, or a doctor that's uh uh just a voice coming out of a window screen. I want that doctor saying, by the way, how was your trip to uh you know France last last year, or or how are you doing with this pro whatever. You went for sodium intake when you were in Paris, Mark? Yeah. No, actually I didn't. Um but I don't think my doctor listens to this podcast. Uh so anyway, but but really that human connection, and I think as as it kind of disconnected, I think people are wanting it back more. Yeah. So I think that's where what we do and firms like us can really come into play and can really be a part. And does everybody want that? No, we're not for everybody, but I tell you what, that human touch I think is just getting more and more critical. That's great.

SPEAKER_01:

Well, I do want to talk about some actual steps to take in uh engaging that younger generation for your wealth transfer. But before we do that, that's a perfect segue to our website, masterplanretire.com. There you can schedule your complimentary consultation. It's a simple schedule now, click, and then you're right there on our calendar, you find a time that works best for you. You can also call us at the office 770-980-9262. You know what's great about that complimentary consultation?

SPEAKER_00:

What's that? Is we will actually uh for no charge, we will run a series of reports looking into your future and saying, this is what my money is, this is what my savings is gonna be for the next X number of years until I retire. Is my money gonna last? That's kind of a good feeling to know where you stand. Do I need to increase savings? Do I need a better return? Do I need more guidance? Yeah. But also we're going to introduce some um curveballs. Okay. What if taxes go up? And that what if is actually should say when taxes go up? What about if I lose my spouse? What about this? What about that? And then you kind of know what to plan for, and it helps us if we decide to work together to include those pieces into that plan. So you know that that complimentary consultation is powerful. Um, and even if you just look at those reports and say, thank you very much, I I really know what I need to work on, that's great. At least we gave you a helping hand. That's perfect.

SPEAKER_01:

So preparing for a wealth transfer includes nine critical steps from defining family goals, organizing documents, especially estate planning documents, minimizing taxes, educating heirs, and regularly updating plans because we know that life moves and changes just like a plan has to be flexible. If you're preparing for a wealth transfer, here are nine key steps to keep in mind. Number one, start early, yes indeed, and define your family's goals and values. Number two, communicate openly with family members about your plans. This is a hard one, like we mentioned earlier. Um defining goals and values, you know, we do that at our first meeting basically with everyone we meet. That was number one, but communicating those can be difficult even between spouses. Sometimes we find out in those first meetings their goals and values are completely different. And they find out that their values are different.

SPEAKER_00:

They look at each other and go, I didn't know you wanted a like house. I didn't know you wanted a boat, or whatever it may be. Yeah, it is kind of interesting.

SPEAKER_01:

And then number three is also super simple. Take inventory of assets and organize essential documents from financial statements to your estate planning documents, trusts, pour-over wills, powers of attorney, all of that good stuff, and make sure that they are aligned as well. Make sure the benefici beneficiaries on certain accounts are uh respect what the trust is saying because believe it or not, beneficiaries on accounts, transfers on death will override whatever the trust says.

SPEAKER_00:

And and that organization is really important. One of the first things we do, as you know, when somebody comes in to see us, is we create a fairly simple financial statement just to kind of get us started. But as folks begin working with us, we want a detailed, and how many times can have we seen people come in that have forgotten about this old 401k they had 20 years ago or that little account they inherited from uh their aunt or whatever, and all of a sudden we're seeing stuff materialize that they had forgotten they even had. And who knows what would have ended up, you know, with that account or old 401k or whatever. So it's uh and we've even had uh help people find old 401ks. 30 years ago, I've got a client right now that uh old 401k from 30 years ago, it's been the company's been absorbed, changed, sold. 401ks have changed, been absorbed, whatever. And it's like uh it's like a detective novel. I mean, it really is trying to find some of these old accounts. So that is important to know, but m more importantly is pulling them together and having them available for the family. God forbid, you know, the father, the mother passes away very quickly, especially if one of the other is in charge of their money in a family. So that's that's a big step.

SPEAKER_01:

Uh number four, and this is also part of the holistic retirement journey and planning, but create a solid estate plan, um, wills, trust, powers of attorney. You'll know what you need when you work with your financial professional and attorneys. Um, what works for your plan, what do you need in place?

SPEAKER_00:

Um quickly before we leave that, but yeah, please, if you have any kind of an estate at all, don't go the cheap route. Don't, I mean, it's you know, if you're 25 years old and own very little, going online to do a wheel is fine. Sure. But when you start getting this multi-generational, you start getting these different um retirement accounts, um, you start getting into maybe some properties owned here and there, you just get over a certain amount of money, you have uh maybe property in more than one state, you are talking about uh documents that have to be correct. I know our attorneys, uh part of our team, they're state planning attorneys, and their trusts are like an inch thick. Not because they're trying to charge by the page, but because of the fact they want all the what ifs in there. Because guess what? Just as soon as you think you've got it straightened out two years later a tax law changes. Well, you don't want to have to go back and change the trust. You want, but if this happens, we're gonna go this route or that's gonna happen. So don't don't go the cheap route. And by the way, I'm I'm not saying go out there and spend$8,000 on a trust. Um our attorneys, because they work with us every day, much more value or oriented than that, but still they are uh highly uh trained, they've worked around probate courts and around trust, estate planning. Uh they know what they're doing. So because we work with them so closely, do a lot of the legwork, uh they do give uh uh they're very, again, um fair fairly priced. That'd be a good way to put it in.

SPEAKER_01:

It's a team effort, and yeah, absolutely. It's good to have everyone on the same page. It's one of it's a huge value to our firm that we were able to team with with our attorneys, absolutely. Um I do want to try to get through these because we have a few more topics, but another point to making sure that those trusts are covering, I mean, we've got digital language now built into trust because of how many passwords, digital assets that people own now that has to be written in the trust, otherwise you're leaving too many things on the table there. Um minimizing taxes, tax strategy. There we've had a bunch of episodes in the past about tax strategy. We won't get too deep into that, but what are the tax strategies you can employ for your transfer of wealth, whether it's through to strategic gifting, certain trusts, things like that.

SPEAKER_00:

And it's not just about the taxes you're paying, it's about what tax burdens are you passing on to the next generation. Absolutely. Um that law has changed, and therefore we have to treat it differently. Absolutely.

SPEAKER_01:

Um six, choose the right people and advisors to carry out your plan. Absolutely, make sure you're working with a holistic fiduciary advisor, but even down to the um personnel that you write into your trusts for trustees or your executors on your wills, executrixes. Um there have been three at least three appointments over the past few weeks, um three different client appointments to where they were not sure who they could list as trustees, whether they just didn't have a lot of family or heirs or had tricky, sticky family situation. Right. Um you gotta you that's a really big deal that you gotta make sure that you can cover and do a little digging if you don't have anybody.

SPEAKER_00:

Yes, a lot of conversations and and you know there are uh of course corporate trustees, but you've got to be careful with corporate trustees because many of them require um not only will they be your trustee, but they also want to be the money manager. I think that's a conflict of interest. I think it's gonna cause them to hold back on giving out money like they should. It's in the news right now, uh the Jimmy Buffett estate. Uh they're saying that the trustees there, uh again, this is I'm not saying who's right and who's wrong, but the the people that are like his wife that are trying to make them, you know, live, um uh or she's accusing them of holding back on distributing funds. Is that true? I don't know. I'm not blaming anybody. I'm just saying that's that's kind of a dangerous combination, somebody managing the money and controlling the money. Uh so be careful. We can certainly uh offer up some references for that. Absolutely.

SPEAKER_01:

Uh just a few more points. Number seven, educate and prepare your errors. We're gonna talk a little bit about how to do that next. Eight, plan for special circumstances, again, emergencies, healthcare needs, family business, international issues, even cross straight state lines if you have property in another state. Um, and then nine, review and update your plan regularly. Okay, so we have about five or so minutes left. I want to go over the five forms of family capital. True legacy goes beyond money. Frameworks like the five forms of family capital show that cultural, human, social, and intellectual capital are just as important as financial capital and building multi-generational wealth.

SPEAKER_00:

I love the clients that will sit down and write a letter to their family as part of their final uh documents and just saying this is uh my beliefs, this is why I believe that way, this is you know, whether it came from my parents, my grandparents, my life experiences, this is um what it's like to have you as my children, my grandchildren, these are my favorite uh experiences I've had with you. Just kind of sharing their heart that um I mean, hopefully they'll share it while they're alive too. But I mean kind of a kind of a final, this is this is me. Um I think they used to call that an ethical will, which I thought was kind of a weird name for it.

SPEAKER_01:

Um VHS tapes that they'd film themselves.

SPEAKER_00:

Well, that's uh I guess you can do that too. Put on a little uh USB um or whatever, little drive. But yeah, that's you know, uh if you've lived a lifetime and you've got people that love you, let them know you love them, but also let them know kind of the whole story around you and them and us.

SPEAKER_01:

Um yeah, well, this is some these are some ways to do that while you're still living. Uh one, cultural capital defines the family's shared vision, purpose, values, and roles. It can be built through simple activities like drafting a vision during pizza night, or more formal retreats like you mentioned before, formal retreats with facilitators like the advisor Mark knew in the past, who would have family retreats to discuss these things. But the cultural capital, and I think it's even more important to get them aligned, get your family aligned while you're here. Um there's so much more investment, and they see the passion and the reasons why. Um and then there's human capital that focuses on physical and mental health. Families can build this through activities like phone-free walks. What is that? Um group fitness classes sponsored by elders when possible. Um social capital strengthens relationships and decision making. Options range from family book or movie clubs to virtual game nights that bring everyone together. What are we playing on so far, Mark, with so with these three so far? It's it's about the relationships, the connection, the trust, all that. 100%. Um intellectual capital shares knowledge and wisdom across generations. This might be a family member teaching a skill or recording a family podcast to preserve stories and life lessons. Um I think that's even financially. I mean, we know um we're not really taught too much budgeting budgeting in school, and a lot of families don't discuss that either. You know, depending on the generation or or upbringing, um, intellectual capital can be financial as well. Um, but even you know, showing your grandson how to whittle or things like that, that builds that connection and also builds a legacy that's worth preserving and that will inevitably carry over to the overall plan and wishes, and I think that all that helps.

SPEAKER_00:

Again, a greater connection uh connectivity, but also just um uh I I guess from a standpoint of what was mom or dad really like. I'll never forget, and I know we're running out of time, but um, when my grandmother, uh my my father's mother was in her 90s, um, she was over for Thanksgiving or something, and we just sat in the living room, turned on the VHS recorder, right? And just talked to her and asked her questions and what was it like growing up and what was this and what was that, and just to get it on tape and things I had never heard, by the way. So I wish we'd been maybe more proactive at that earlier in life. But it's you you you the money has nothing to do when it comes to the memories uh that you develop and the things you remember about.

SPEAKER_01:

Well, and I think it also instills um a reason to honor somebody as well. If you see a plan that has been put put in place um for someone's legacy, um those connections help inspire you to want to move that forward and honor and continue that process. Um and then finally, um the fifth is financial capital. So of course, traditional assets like cash, securities, and real estate, while these are essential, it should be approached alongside the other four forms of capital to again build a fuller legacy.

SPEAKER_00:

Yep. And uh, you know, I was gonna say if some if anybody wants a list of this, I think we can send it because I know some people are driving around or or whatever, maybe more in their lawn, listening to a podcast or whatever it may be. But I think this would be a great list to have available. Uh folks just uh contact us, go to the website, um, and and uh give us a call or or do the email and say, hey, I want that list from the from the show. Um but it's just so many good points that we could again we could delve into every one of these areas and just really dig into it. But I hope this show is really important. I hope it's uh uh meaningful because I think it's got um it's a show we don't normally do. It's just a little bit different than what we normally cover. So I really hope that this uh becomes a valuable piece of information and um share it with your friends.

SPEAKER_01:

Yeah, absolutely. And uh again, check out the website, masterplanretire.com, schedule your complimentary consultation. Um, the first conversation that we'll have with you is on your retirement hopes, dreams, fears, goals. Talk about legacy. We talk a lot more about the psychological stuff and emotional stuff up front. Um, and then we get into the financial discussion and what do we need your money to do? How long will it take you? Again, we'll run a series of reports, kind of like uh getting your blood test from the doctor before you know what to treat. You have to see what the symptoms are and where the strengths and weaknesses are. Masterplanretire.com.

SPEAKER_00:

Yep. Um appreciate you joining us today. It's been uh uh hopefully a great episode. Just hope you visit their website, masterplanretire.com. There's so much good stuff there. But until we see each other again, remember plan well and prosper.