The Difference Between Having an Estate Plan and a Wealth Transfer Plan

estate plan

Accomplishing Your Family’s Goals May Require Special Planning


If you have an estate plan in place, you may believe you’ve covered all the necessary bases for your family’s financial future. Even if you have all the proper documentation in place, though, you could be missing an important piece of the puzzle if you don’t have a wealth transfer plan. In this article, we’ll discuss the differences and help you determine the type of planning you may need to accomplish your goals for your family’s future.

Estate Plans

Estate planning documents are the best way to ensure your assets are distributed according to your wishes when you die. When you pass away without a will or trust in place, state law will determine who receives your assets. Unfortunately, this may not be in accordance with what you would have preferred, and it can be a lengthy and costly process for your heirs, too. When you record your wishes in a legal document, however, you get to choose exactly who benefits from your estate.

Another reason to have an estate plan is that it can provide peace of mind to your family during a trying time. Without one, your loved ones may be left with some or all of the following:

  • Expensive attorney and court costs
  • Wasted time
  • Stress and frustration
  • Distribution of assets with no regard for your wishes
  • Family strife

Having a proper estate plan in place mitigates all of the above, and you also get valuable flexibility in who benefits from your assets. You could choose to leave your wealth to your family, of course, but you may also choose close friends or your favorite charity. Your assets could also be used to pay taxes, attorneys, or other service providers. When you take the time to have the necessary documents drawn up before your end of life, you get to choose where your assets go and who benefits from them – and it lays the groundwork for a fairly quick process. Additionally, when you’ve made your wishes clear and put them in writing, it can help keep or instill harmony among your heirs during a challenging time.

If you already have an estate plan in place, we suggest that you review and update it annually to ensure it continues to reflect your wishes as your life and family evolve. If you haven’t begun your estate plan yet, an estate planning attorney is a helpful place to start. They can help you determine the documents you will need to meet your family’s needs, and many will work alongside your financial advisor, too, to streamline your planning.

Wealth Transfer Plans

The estate planning process described above can feel complex – and it can be emotionally taxing, too. If you already have your estate documents in order, that’s great! You’ve accomplished something important for yourself and your loved ones. However, there may be another piece to the puzzle. An estate plan without a wealth transfer plan could lead to these common challenges:

Family Discord

Money matters can often lead to jealousy or even animosity. Many families are sadly torn apart by disagreements stemming from poor estate planning or a failure to communicate about the deceased’s wishes. Heirs may feel short-changed, angry, or confused about the deceased’s decision-making, and feelings of hurt often lead to outright anger. This type of discord is especially concerning when a family business is involved.

Loss of Wealth

Often, family wealth is gone by the second or third generation. It can happen because heirs are simply unprepared to receive an inheritance. If they lack financial know-how, it’s easy to make critical errors in tax planning, investing, and more.

Too Much Too Soon

The concept of “Sudden Wealth Syndrome” can be truly problematic for unprepared heirs. It’s a psychological condition that can feel a bit like an identity crisis for people who receive a large sum of money and aren’t sure how to handle it. Many heirs give in to the temptation to spend with wild abandon, failing to understand they are quickly squandering a family fortune that took considerable time and effort to build.

If you’d like to protect your family against these potential ills, you should consider a wealth transfer plan. Your personalized plan will consist of a series of decisions you make and actions you take to prepare your heirs for what will happen once you’re gone.

Goals of Your Wealth Transfer Plan

While your wealth transfer plan itself is important, we believe the most important part is practicing open communication with your loved ones about your goals and values as they relate to money and family. Here are a few helpful steps you can take:

  1. Provide clarity about your chosen heirs and account beneficiaries. This goes a long way, as does providing a timeframe for asset transfers. Yes, this discussion may be challenging, but taking this step gives you the opportunity to address issues while you’re still alive and put potential problems to rest before they fester and lead to greater discord later on.
  2. Build a bridge between your heirs and your financial advisor, your attorney, and your tax advisor. If they have questions, it’s easier to address them now while you’re still living.
  3. Share your financial values with your family and discuss your long-term goals. This will help them to be better prepared when the time comes to receive your assets and carry on your legacy.
  4. Discuss your options for your wealth transfer plan, including the potential tax consequences of direct gifts. You should also share your expectations around charitable giving if philanthropy is important to you.
  5. Encourage your heirs to begin their own estate plan. When heirs have documents in place, they are better prepared to accept their future inheritance, and to make preparations for their own transfer of wealth, too.

Final Thoughts on the Difference Between an Estate Plan and a Wealth Transfer Plan

Having an estate plan in place is crucial, and it’s a smart place to begin when you’re making preparations for your family’s financial future. However, a wealth transfer plan adds an important layer of preparation for the long-term preservation of your assets. Using both tools in concert with one another can help you ensure your assets are distributed and managed according to your wishes, and that your family can benefit from your wealth-building efforts for generations to come.

If you’d like professional guidance on planning for your family’s needs, please reach out to us today. We are happy to answer your questions and help you determine whether our services are a fit for you. We look forward to hearing from you!

Disclosures: Aviance Capital Partners, LLC (“ACP”) is an SEC registered investment adviser located in Naples, Florida. Registration as an investment adviser is not an endorsement by securities regulators and does not imply that ACP has attained a certain level of skill, training, or ability. While information presented is believed to be factual and up-to-date, ACP does not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of ACP as of the date of publication and are subject to change. Not all services will be appropriate or necessary for all clients, and the potential value and benefit of the ACP’s services will vary based upon the client’s individual investment, financial, and tax circumstances. The effectiveness and potential success of a tax strategy, investment strategy, and financial plan depends on a variety of factors, including but not limited to the manner and timing of implementation, coordination with the client and the client’s other engaged professionals, and market conditions. This should not be construed as specific investment, financial planning or tax advice tailored to an individual reader. ACP suggests that readers consult a financial professional, attorney or tax advisory professional about their specific financial, legal or tax situation. Past performance does not guarantee future results. All investment strategies have the potential for profit or loss, and different investments and types of investments involve varying degrees of risk. There can be no assurance that the future performance of any specific investment or investment strategy, including those undertaken or recommended by ACP, will be profitable or equal any historical performance level. Additional information about ACP, including its Form ADV Part 2A describing its services, fees, and applicable conflicts of interest and its Form CRS is available upon request and at For current ACP clients, please advise us promptly in writing, if there are ever any changes in your financial situation or investment objectives, if you wish to impose any reasonable restrictions to our management of your account, or if you have not been receiving at least quarterly account statements from your account custodian.


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