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Timothy Duma Addresses Key Considerations in Legacy Asset Planning

BOLINGBROOK, IL / ACCESSWIRE / December 5, 2018 / Certain topics make for difficult or uncomfortable conversations even among family members, but these discussions are nonetheless essential and will prevent issues in the future. Such is the case with money or assets in general, which are central to estate and legacy planning. While these two concepts overlap significantly, there are subtle differences, expert financial advisor Timothy Duma explains. With estate planning, the focus is on making preparations for the preservation, management, and distribution of a person's assets after their death or in the event of incapacitation. While legacy planning also addresses these aspects, it goes beyond the tangible wealth to incorporate the guiding principles, beliefs, and moral convictions of an individual.

Some statistics highlight the importance of legacy asset planning, such as the findings of a study that showed an immense waste of family fortunes. According to Williams Group, 70% of affluent families see their wealth evaporate by the second generation, while 90% lose theirs by the third. Meanwhile, the United States is on the verge of what has been called the ''great wealth transfer'': according to a study by Accenture, Baby Boomers alone will hand down $30 trillion worth of assets in the next 30 to 40 years. Considering how difficult it seems to be to preserve family wealth, people engaged in legacy planning should start by selecting their beneficiaries, says Timothy Duma. However, these decisions should be discussed openly with family members and used as an opportunity to teach the heirs financial literacy and also to communicate the wishes of the planner. Open dialogue is critical for ensuring that a legacy will indeed survive because transparency will prevent disputes in court and the family rifts they inevitably open, Tim Duma notes.

A major reason for having a legacy plan is that it ensures wealth transfer in the most advantageous way for the beneficiaries. This predominantly applies to taxes associated with inheritance and ties in with another key consideration in the process: the assembly of a specialist team to help everything progress smoothly. Since legacy planning involves far more than a roadmap for asset distribution, a person should seek advice from experts in several areas. The team will need to include legal, accounting, and wealth management advisors, but circumstances may also call for the inclusion of risk management professionals, relationship coaches, and wellness counselors. Another person of critical importance is the executor, whose choice should be among the primary considerations as this is the person who will oversee the implementation of the legacy plan, Timothy Duma points out. Many people approach the process mindful of all the essential elements: carefully constructing their legacy vision, meticulously reviewing their assets and liabilities, assembling a team of expert advisors, and procuring all the necessary legal documents. However, few realize that the legacy plan put in place is only the first draft: it needs to be revised every few years if there is to be problem-free implementation. Events such as changes in estate or tax law; births, deaths, marriages, or divorces in the family; health issues or relocation are likely to require adjustments to the already existing plan.

Timothy Duma attended the Southern Illinois University Carbondale, obtaining Bachelor of Science degrees in Marketing and Finance. Currently based in the Greater Chicago area, he has been involved in financial and estate planning since 1990.

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