Planning for Wealth Transfer a Value Add From Financial Advisers

According to the LIMRA Secure Retirement Institute, more than $7 trillion will be inherited by Baby Boomers and younger generations in the next several years. In addition, nearly three-quarters of these investible assets are held in taxable accounts.

According to a recent survey by financial services firm Edward Jones, 77% of Americans believe that estate and legacy strategies are important for everyone, not just wealthy individuals, yet only 24% of Americans are taking the most basic step of designating beneficiaries for all of their accounts.

Of Americans who work with financial advisers, 64% reported never having discussed estate goals and legacy plans with their financial adviser. Furthermore, only 34% of Millennials and Gen Xers have discussed their estate/legacy goals with their financial advisers, which increased only minimally for Baby Boomers (38%), the generation most likely to need estate plans in the near future.

However, almost all Americans who have discussed their estate/legacy goals with their financial advisers have updated their plan since creating it (98%). Additionally, 61% involved their family the last time they reviewed their estate/legacy plan with their financial adviser, increasing to 74% for Americans with children in the household.

“Designating beneficiaries on each of your appropriate accounts is the simplest and quickest way to get started. To ensure loved ones are taken care of, it’s crucial to review and update estate plans regularly, and most importantly, communicate these wishes to the beneficiaries throughout the process,” says Scott Thoma, principal with the Investment Strategy group at Edward Jones.

People who have received an inheritance from their parents or relatives are more than twice as likely than those who haven’t to feel prepared for retirement (38% versus 17%), according to a survey by the Associated Press-NORC Center for Public Affairs Research. Older Americans with an inheritance are also more likely to believe that their savings will last throughout their retirement (37% versus 21%).

Lincoln Financial Group has introduced Lincoln Wealth Pass, a new withdrawal rider that is specifically designed to help beneficiaries stretch and protect the money they’ve inherited. Lincoln Wealth Pass is available with American Legacy , Lincoln ChoicePlus Assurance and Lincoln InvestmentSolutions variable annuities for an additional cost, and offers an opportunity for beneficiaries to guarantee they receive their full inheritance by stretching distributions over their life expectancy. Lincoln Wealth Pass is designed to help financial advisers and their clients efficiently transition wealth from generation to generation.

With Lincoln Wealth Pass, protected annual income begins immediately, and continues until the full investment is returned over the annuity owner’s life expectancy, provided they are still living. If there is account value remaining upon the death of the owner, any remaining protected annual income payments can continue to their beneficiary, until the initial protected inheritance amount is zero.

“This estate planning strategy is a compelling option to help clients guarantee their inheritance through the protection and market growth potential an annuity can help provide,” says John Kennedy, head of Retirement Solutions Distribution at Lincoln Financial Distributors. “We continue to build out our broad portfolio of annuity solutions to help meet the needs any saver might face during and approaching retirement. Lincoln Wealth Pass adds to the depth and breadth of our offering, providing a unique option for wealth transfer.”