The Great Wealth Transfer – Hovis & Associates

Baby Boomers (those born 1946-1964) and the Silent Generation (those born 1945 and before) share some common characteristics.

They have a strong work ethic, having worked hard for advancement throughout their careers. Often conservative in their spending habits, these generations have amassed great wealth over their lifetimes.

And as they enjoy their retirement years, their estate values continue to grow instead of decline as they age.

As people from these generations begin to pass away, we are starting to experience the biggest wealth transfer in history, and it will continue over the next few decades.

Despite grieving the loss of their loved one, clients are often overwhelmed with the many decisions that need to be made.

We have received calls from several clients in the past year after the loss of a parent or grandparent asking what to do with all they have inherited. They now have this incredible gift and don’t want to waste it.

The first question is often, should I pay off my house? It is quickly followed up with, can I retire now? Hovis & Associates can help answer these questions.

With financial planning, we can show you options on how to put these inherited assets to work for you. We listen to you discuss your goals, gather information to analyze your financial position, and discuss options to best meet your needs.

There is often another factor that younger clients may not be aware of: RMDs or required minimum distributions. If the inherited accounts are IRAs, there are special rules the IRS imposes.

Once a client (or in this case, the deceased loved one) reaches the age of 70 ½, they are required to withdraw funds annually.

Because the money in these accounts has never been taxed, it is considered income and therefore subject to income taxes. If these RMDs are not distributed, the IRS imposes a 50% penalty.

Hovis & Associates can help you manage these accounts to ensure you satisfy the required minimum distributions and don’t incur a penalty.

Managing RMDs and financial planning are just a few of the services Hovis & Associates can provide. If you have questions or need assistance with financial accounts, we are here to help. Call us today to schedule a meeting.

Source: hovisandassociates.com

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