What Is Wealth Transfer?

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  • Written By: Tara Barnett
  • Edited By: Melissa Wiley
  • Last Modified Date: 24 September 2014
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Wealth transfer is a term used to describe the transfer of money from one individual to others, typically after or in anticipation of the death of the person whose wealth is being distributed. Many people with significant funds start planning for wealth transfer long before death, because distributing wealth is often subject to complex taxes that can be avoided by starting early. People without many financial assets should still look into some form of planning to distribute wealth upon death. The best way to efficiently and correctly plan for wealth transfer is to meet with a professional in the relevant field who can assess the total of one's assets and come up with a strategy that adequately releases those assets into the hands of others.

A variety of financial institutions are available to facilitate wealth transfer, but a good place to start is working with a financial adviser. When looking into wealth transfer, there may be a number of confusing terms, and it may be difficult to get started or even understand what is being offered. In the very least, a financial adviser and an attorney will likely be required for creating legal and operational plans for wealth transfer.


Some people choose to take care of significant amounts of giving prior to death. Distributing wealth by paying for the education of descendents, paying for medical care, or a number of other monetary giving strategies can reduce the amount of wealth lost to taxes. Just because money is transferred between spouses or to descendents does not necessarily make it free from taxation, but there are ways to strategically plan giving to minimize the amount of taxes paid. Laws on estate or inheritance taxes vary by region and should be investigated thoroughly to avoid legal trouble.

Many people give money and other assets not only to family and friends but also to institutions. It is possible to distribute wealth to charitable foundations, schools, and other groups. Often, gifts to schools and libraries can be restricted such that the money can only be used in a particular way. In many cases, giving a gift in this manner results in social recognition, so some people choose to give these gifts prior to death.

Wealth transfer is not only about giving away money one has in bank accounts. Beneficiaries from life insurance, retirement plans, and other assets also receive money that must be planned for. One can designate in a will to whom items like houses, cars, and material possessions will go. The entirety of what makes up a person's wealth should be accounted for prior to death.


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