Knowledge is Power: Taking an Inventory.
We have all heard about the “Great Wealth Transfer” - the intergenerational shift where an estimated $100+ trillion dollars worth of assets will pass from Baby Boomers to the younger generations. What is not talked about as much is how this transfer will occur, and how to best plan for it.
This is the first in a new “Knowledge is Power” series I will be publishing that discusses legacy wealth planning. This is a general information series that I hope will help families to embrace life’s financial uncertainties in a way that provides a framework to think about legacy wealth planning. This first article talks about some of the reasons why it is important to take a moment and write out the contents of your financial life.
Many people assume that they will die (they’re right about that part) and that the laws of inheritance will take care of the rest (definitely, maybe). For many people it feels easier at first to avoid rather than engage with legacy planning. That is understandable because legacy planning can be uncomfortable. But I promise you that taking control of your financial legacy will bring a sense of relief. That is because legacy planning gives you control over the outcomes that you want.
Start by taking an inventory. Many people with significant assets are reluctant to discuss wealth planning with their heirs. In fairness, it is a morbid thing to think about. Many families have assets that have been held for decades without ever being touched. Perhaps it is the family camp that your great-great-grandfather purchased in the 1930s that you and your siblings have enjoyed and now your kids (and their kids) are now enjoying. Or perhaps it is a stock portfolio that has steadily outperformed using the “buy-and-hold and never look at it again” method. There are countless things - the rental house, the safety deposit box, the car in the garage that hasn’t seen daylight in 30+ years. You may also have estate or trust documents that you inherited but avoided looking too closely at - those should all be included in your personal inventory.
A Case Study: The Camp That Divided a Family
Consider a family I'll call the Fortins. For fifty years, their family life centered on a lake camp on Lake Champlain that Wade Fortin bought in the 1970s—every summer, three children and eventually seven grandchildren gathered there. Wade often said the camp should “stay in the family forever,” and everyone assumed someone had made it official. No one had. When Wade passed unexpectedly, the family found the camp still titled in his name alone, with no trust and an outdated will that simply split “all remaining property equally.” Three siblings now jointly owned one house, with no agreement on what “keeping it in the family” actually meant: one wanted to keep it, one wanted to sell, and one couldn’t afford to buy out his siblings or cover his share of the taxes and repairs.
Because none of this was ever written down, the family had to reconstruct it after the fact—digging for the deed, the will, and the accounts, with no record of what Wade actually wanted. What they found (a property titled in his name and an outdated will) forced the estate through probate and, when the siblings couldn't agree, the court ordered a forced sale to a stranger. Now two of the children are no longer on speaking terms, and the family camp is gone. Wade had been a disciplined saver, but accumulating and planning are two different things. A single afternoon with pen and paper could have surfaced these problems while he could still solve them.
By taking an inventory of your financial life, you can plan and control for the future. Ideally, a personal inventory should be completed early and updated reasonably often. Gather details for these items, write them down and include where they are and how to access them. If you feel ready, share that list and your wishes for the contents of your list with your heirs. Sit down with them so that you can discuss putting a plan in place to avoid unnecessary taxes, probate costs, infighting, etc. By sharing your inventory you can feel better knowing that not only has all been accounted for, but also that the people you love know where to look and exactly what they will find.
Potential sources of critical information include:
Investment assets
Real Estate and business interests
Property deeds
Insurance policies
Personal items
Account statements
Estate planning documents (trusts and wills)
Liabilities (and how they’re covered)
By taking a thorough inventory of your financial life, you can ensure your legacy will not go to waste. If any of this resonates with your situation, I encourage you to start your personal inventory list - one page, handwritten is fine.
In future articles I will talk about how to put your inventory to good use by covering some of the basics, including inheritance taxes, real estate titling, estate planning essentials, as well as the role that family meetings can play when it comes to legacy planning.