Hey everyone, it’s Tony Leonardi, Certified Financial Planner® and author of A Smarter Way to Retire - 10 Steps Towards a Confident Financial Future, coming to you from my home office in Newtown, Connecticut. I hope you enjoyed a fantastic Labor Day weekend! This week on the A Smarter Way to Retire, we’re diving into a massive topic: the great wealth transfer. With $84 trillion set to move from baby boomers to millennials and younger generations by 2045, according to Cerulli Associates, it’s time to plan your legacy strategically. Whether you’re dreaming of funding your grandkids’ education, setting up a family trust, or supporting a charity, dynamic planning helps to ensure your wealth creates the impact you envision without jeopardizing your retirement. Let’s explore how to make it happen.
I’m recording a bit early this week as I’m heading out for a busy birthday week. My dad, Tony, turns 85 on September 3rd, and we’re throwing a big celebration with family and friends in Middlebury. Then, Lori and I are off to Las Vegas for a night before heading to Utah for her aunt’s 80th birthday party, where we’ll meet up with family from California and Portland. One night in Vegas—wish me luck at the slots! But let me be clear: investing in the markets is not gambling. Gambling is rigged for the house to win—the longer you play, the more you lose, with games designed to take 5–10 cents per dollar bet. Investing, on the other hand, means owning a piece of growing, profitable companies. Sure, you might hit a rough patch if a company has a bad quarter, but the longer you stay invested, the better your odds of winning, based on historical market growth. I’m not counting on a Vegas jackpot, but I am counting on smart planning for my clients’ futures.
The great wealth transfer is a game-changer for high-net-worth retirees. This isn’t just about passing on money—it’s about legacy planning that reflects your values, like supporting family, education, or causes you care about. My book, A Smarter Way to Retire, emphasizes dynamic, long-term planning over static wills or guesswork. Unlike advisors chasing hot stocks, I focus on your goals, using tools like MoneyGuidePro to model wealth transfers while keeping your retirement secure. The first step? Ensure your needs and wants are covered, adjusted for taxes and inflation, before gifting or leaving a legacy. How much can you afford to give without risking your financial goals? MoneyGuidePro answers that by modeling your plan’s probability of success.
Let’s get into the nuts and bolts of wealth transfer strategies. A simple will or casual gifting won’t cut it—dynamic planning is key. Start with trusts. A revocable living trust lets you control assets during your lifetime while setting clear instructions for heirs, avoiding probate’s delays and costs, which can eat up 4–7% of an estate in some states. For larger estates—over $13.6 million for individuals or $27.2 million for couples in 2025, per IRS rules—an irrevocable trust can reduce estate taxes, which hit 40% federally plus state taxes on amounts above those thresholds. I’ve helped clients set up trusts to pass $2 million to grandkids for college, protecting assets from creditors and taxes. For closely held businesses, poor estate planning can be a silent killer. You won’t see headlines of major companies like Enron collapsing solely from bad estate plans—those failures often tie to mismanagement. But for family businesses, a missing or outdated plan can halt operations. Imagine a $10 million retail chain stuck in probate or a $3 million tax bill forcing a fire sale of a manufacturing firm. MoneyGuidePro models trusts, gifting, or partnerships to avoid these traps, ensuring your business and legacy thrive.
Next, gifting strategies are a powerful tool. You can gift $19,000 per person annually in 2025 without triggering gift taxes—$38,000 per couple to each child, grandchild, or anyone else. Over time, this significantly reduces your taxable estate. I’ve seen clients gift to enjoy their family’s happiness now, like my mom did with a big family trip to Italy. I’m currently modeling a client’s plan for a Galapagos Islands family trip—those “wishes” are part of every financial model I run, whether it’s funding college, 529 plans, or a home down payment. Modeling ensures these gifts don’t jeopardize your retirement. For high-net-worth clients, a grantor-retained annuity trust (GRAT) can transfer appreciating assets like stocks or businesses to heirs with minimal gift taxes, retaining income for yourself. Qualified charitable distributions (QCDs) let you donate up to $100,000 annually from your IRA after age 70½, tax-free, supporting charities while lowering taxable income. Donor-advised funds offer flexibility—contribute $50,000 for an immediate tax deduction and distribute grants over time. Family limited partnerships (FLPs) transfer business or real estate assets at discounted valuations, saving on taxes. A client used an FLP to pass a $3 million rental property to their kids, leveraging valuation discounts. MoneyGuidePro models these—trusts, gifting, GRATs, QCDs, FLPs—to show their impact on your retirement’s success. One couple I worked with gifted $500,000 to their daughters over time while maintaining a 95% probability of success for their retirement. That’s the power of dynamic planning—helping loved ones now while securing your future.
Ready to plan your legacy? My two-phase process starts with a complimentary one-hour assessment. I gather your financial data—assets, income, expenses, and goals like funding education or charities. Using MoneyGuidePro, I calculate your portfolio’s probability of success and identify steps to optimize your wealth transfer. From there, you decide if a formal paid plan is needed, like setting up a trust or gifting strategy. Sharing financial details can feel tough, but as a CFP® professional, I’m here to earn your trust. Book your complimentary assessment at [LeonardiFamilyWealthcare.com](https://LeonardiFamilyWealthcare.com) via my Calendly link—it’s an hour to gain clarity. Grab our free 2025 Wealth Transfer Checklist to start planning today.
That’s a wrap for this week’s A Smarter Way to Retire. Follow me on Instagram (@TonyLeonardiCFP) and Facebook (LeonardiFamilyWealthcare). Subscribe on Spotify, Apple Podcasts, or YouTube, and leave a review. Next Friday, September 12, we’re exploring AI in financial planning. Book your complimentary assessment and plan smart, retire happy!