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Legacy Planning – Thinking About the Next Generation

Legacy Planning – Thinking About the Next Generation EGSI Investment Management

You’ve probably passed on pieces of wisdom to your children, but have you considered how you’ll pass on your wealth? Now that you’re reaching a certain age, you may be wondering how you’ll pass on family heirlooms, property, or the wealth you’ve built over many years. Proper legacy planning could be one of the greatest gifts you give your loved ones. However, you may be delaying the process of creating an estate plan because you’re thinking, “Where do I start?”

There are complicated tax laws regarding estate planning, not to mention all the changing laws that are hard to keep track of. With the Biden administration eyeing a “wealth tax” in a recent tax plan proposal,[1] it could be more important than ever to have a comprehensive plan for the transfer of your estate to your loved ones.[2] Here are the basics to get you started.

Wills and Trusts – What’s the Difference?

Let’s look at the key differences between wills and trusts. A will is a legal document that ensures your estate is distributed the way you wish after your passing. A trust is an arrangement with a manager, or “trustee”, by which your estate is taken care of in your interest. A trust goes into effect when you create it, not after you pass away. But a will must pass through court to ensure efficacy and legitimacy.[3]  This means that wills make sure that your estate is distributed as you wish, and a trust often provides a manager and a legal “place” to store and manage your estate.

Don’t Forget About Taxes

It’s also important to consider how your wealth will be taxed when it’s passed on to your loved ones. Assets can receive a setup in basis so that beneficiaries pay less in capital gains tax. In addition, a partial or full Roth conversion can potentially help minimize taxes for heirs. Another tax minimization strategy is having a life insurance policy set up to distribute to your beneficiaries potentially tax-free depending on the structure of the policy.


The SECURE Act is a comprehensive piece of legislation that could have a major impact on your estate plan. A key takeaway from this legislation is that it eliminates the “Stretch IRA” strategy that has commonly been used to transfer wealth to beneficiaries in legacy planning. Instead of being able to take distributions when they want, most non-spouse beneficiaries must empty inherited accounts within ten years. We can help you understand how you’re affected by this new rule and how you can revise your estate plan.

This conversation only scratches the surface. With changing rules and regulations that can get in the way of giving your beneficiaries the gift of proper legacy planning, it’s more important than ever to consult with a financial advisor. Talk to us here, and we can help you navigate these obstacles tailored to your unique needs and financial goals.

[1] https://www.forbes.com/sites/robertwood/2022/04/27/bidens-scary-death–wealth-tax-plans/?sh=16c5715458b0
[2] https://www.forbes.com/sites/martinshenkman/2022/04/03/biden-greenbook-estate-tax-proposals-should-you-care/?sh=3c86206e3a12

Advisory services offered through EGSI Investment Management, Inc., a Registered Investment Advisor with the State of Ohio. Insurance services offered through EGSI Financial, Inc. Guarantees offered with insurance products are based on the claims paying ability of the issuing company. Investing may involve risk and may result in the loss of principal. Ohio Insurance License # 619337. Please contact EGSI Investment Management if there are any changes in your financial situation or investment objectives, or if you wish to impose, add, or modify any reasonable restrictions to the management of your account, EGSI Investment Management Form ADV Part 2A&B is available for your review upon request.

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