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  • Writer's pictureAJ Cardile

The Greatest Transfer of Wealth and Predicted Trends in Estate Planning

Updated: Jun 12, 2018

Currently the Baby Boomer Generation is aging. They are the largest generational group in US history and they have accumulated the most wealth of any generation. Most Baby boomers are getting ready to retire and transfer their wealth to their heirs. The Boston College Center for Wealth and Philanthropy predicts an estimated 59 Trillion Dollars will be transferred by 2061.[1]

Not only will the baby boomers transferring their wealth need estate planning advice but their heirs that are coming into large sums money will also need estate planning advice that suits their needs. The group known, as millennials will be beneficiaries of the great transfer of wealth. They will need different estate planning techniques and wealth strategies to meet their financial goals.

Some trends that may become relevant in the estate planning field are putting assets into an LLC to use deductions to reduce overall taxes, bequests to grandchildren, and the creation of a pet trust.

Under the new tax bill signed into law by President Trump deductions for property taxes are capped out at $10,000.00. Beneficiaries that are inheriting real property that is not intended to be the primary residence should consider using the property as a rental and creating an LLC to own the property. An LLC can deduct real estate taxes as a business expense. Furthermore, an LLC can depreciate real property and deduct that depreciation from the rental income. Potentially a person that owns second home or vacation home could also use the second property for rental income and place it in an LLC. This is just one factor of many to consider when examining real property taxes and each individuals tax situation is different which may require consideration of special factors.

Today people are living much longer and healthier lives. Many people that are creating there Will may want to leave specific bequests to their Grandchildren or even Great Grandchildren. Many people live to see their Grandchildren mature into there 20’s and 30’s and would like to provide a gift for them upon their passing. There are many options available to the testator when providing for there heirs. Some examples include specific bequests i.e. I bequeath $1,000.00 to my grandson, you could set up a trust for them that protects the principal and only distributes income when necessary or for education, or you could put them as residuary beneficiaries.

Pet ownership stands at 68% for all US households and over the past decade pet ownership has shown a consistent upward trend.[2] The largest segment of pet owners are Millennials followed by baby boomers with the second largest percentage of pet ownership. Pets are a part of our families and many of us would like to care for them if something were to happen to us. One way to address this is to create a will with a bequest that is contingent upon taking care or ownership of deceased’s beloved pet. Another option is a pet trust, which many states have now authorized by statute. Pet trust allows the purpose of a trust to be care for a domesticated animal. In NJ the trust is valid when no living animal is covered by the trust or 21 years whichever is earlier. However, when determining the amount to leave to a pet you must use caution because the Court may reduce the amount of the property transferred if it determines that the amount substantially exceeds the amount required for the intended use.


[2] see page 9

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