Building and Passing Along Wealth
Most Precious Metals investors today do so for the financial stability and security that diversifying one’s investments to include Gold can provide. Precious Metals offer real long-term growth potential in a tangible asset—this is extremely attractive to anyone who has lived through a period of great personal financial difficulty or nationwide economic upheaval. Most of today’s Gold and Precious Metals investors are in the happy position of considering not only how to grow their wealth but also how to make sure their children and their children’s children can benefit from their careful stewardship of their investments. Here, we will briefly examine some strategies for building wealth and then discuss the importance of transferring wealth to the next generation.
You should always consult a financial or investment adviser to discuss the diversity and growth potential of your non-Precious Metal investment accounts. What we want to interject is that diversifying into Gold or other Precious Metals makes good sense because Gold has proven long-term growth potential, is a tangible asset and its value generally moves independent of the stock market. Holding a percentage of your total investments in physical Gold is good diversity offering great security. Physical Gold is ideal for long-term investments; the longer you can hold your Precious Metals, the better. Imagine if 60 years ago your grandfather had purchased a bar of Gold for you. What might that mean for you and your family today?
Passing Gold Along
If you have physical Gold you know you will want to pass to your children or other relatives, give it to them. Really. If you want to avoid legal involvement and taxes, simply gifting Precious Metals to those you would later mark for inheritance is the best way to handle the situation. The IRS defines a gift as, “any transfer to an individual, either directly or indirectly, where full consideration (measured in money or money's worth) is not received in return.” This simply means you gave something freely and received nothing for it.
The IRS also has a tax exclusion for gifts made to children. It has increased over time, and in 2017 was $14,000. That means you can legally present each of your children with $14,000 worth of Gold—or anything, for that matter—without them owing a gift tax to the federal government. That is for each of your children and if you and your spouse file separate tax returns, you each have the right to make such a gift. Please consult your tax attorney or other financial expert before making a final decision as to your course of action, but this factual information is freely available on the IRS website. Making a gift of what you intend to pass to your children is the simplest way of making sure they have it with the least fuss and the least taxes owed on the items.
If gifting your child physical Gold is not something you are prepared to do, make sure you have a properly drawn and witnessed will on file with your attorney.
Passing Wealth Along
This is the difficult part. If you want to set your children and grandchildren up to inherit your wealth and continue to grow it, talk to them. Teach them how to make smart financial decisions. It is said that is it exceedingly difficult for families to maintain wealth for more than three generations. The Vanderbilts are just one of scores of Gilded Age families with famous names and no money to speak of. Experts say that when one generation achieves real wealth, they rarely teach the next generation how to care for and grow that money.
Communication is key to giving your children a real inheritance. For every piece of Gold you share with them, talk about the work that went into purchasing it, talk about why you chose to invest in physical Gold and teach them how Gold represents secure wealth.