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3 Ways to Protect Your Assets Before You Retire


The population of seniors in the U.S. is forecast to nearly double over the next three decades, growing from 48 million to 88 million by 2050, according to Marketplace.

For seniors looking to retire or exit their businesses, cashing out can be both exciting and overwhelming.

According to Investopedia, over $30 trillion in wealth will be transferred from baby boomer parents to their adult children over the next three decades. We spoke with Bob Bestwick and Andrew Cardone, financial analysts and wealth managers with Merrill Lynch about top tips for planning in advance of liquidity events and the process of transferring wealth.

1. Know your priorities.

You’ve probably developed some ideas about where you want your wealth to go, but it’s important to work together with a wealth manager to define your goals, risk tolerance, timeline, and liquidity needs. Accountants and lawyers will help you maximize what you leave behind from a tax perspective, as well.

If you’re approaching a liquidity event, think about factors outside of your business that may affect the outcome. Will the existing market conditions last? Do you know your level of personal readiness? Do your best to lay out the non-negotiables and preferences in the long term with an advisor so that you can work backwards from those outcomes.

“The organization of the wealth and thoughtful implementation of an investment strategy consistent with a client’s goals before a significant monetization should always be a top priority,” says Cardone.

2. Get your financial house in order.

Having a solid financial picture of the business is crucial as you look to finance growth or prepare to exit. This can be time-consuming, particularly if you’re still focused on managing the day-to-day operations of your business.

A skilled advisor or consultant can help give you visibility on potential pitfalls and prioritize action items.

Look to advisors to stay informed about evolving regulations that could impact estate planning or gifting activities. A good example is the much-discussed IRC Section 2704 regulation, which could eliminate your ability to take advantage of certain tax benefits altogether if not acknowledged prior to January 2016.

3. Take your time.

A study by the Institute for Preparing Heirs found that 70 percent of wealthy families lose a significant portion of their assets during the wealth transfer. To avoid pitfalls such as faulty documentation or miscommunication, be ready to dedicate time to allocating assets and establishing gifting plans.

After spending half of your life or more growing a business and accumulating wealth, it’s only appropriate to treat the wealth management and transfer process with the same level of commitment.

So when is the “right” time? Robert Bestwick explains that his advisory group “prefers to show up before the clients think they need us – well before a term sheet is accepted.”



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