When it comes to transferring wealth to the next generation, ask yourself: Are you transferring net worth or actual assets? Most people default to transferring net worth—but that can be a mistake. The key is to focus on transferring assets.
Consider this example:
A father has a net worth of 10 crores, which consists of assets worth 15 crores and liabilities amounting to 5 crores. When planning to pass on his wealth, the real question is, how much of these assets will be transferred to his son and daughter? More importantly, what role do liabilities play, and who will inherit them?
Transferring net worth may simply mask the underlying liabilities, whereas a transfer focused on assets ensures that your heirs receive tangible value without the burden of debt. This approach protects your family’s financial future and preserves the true wealth you’ve worked to build.
Do you have any questions about how to best structure asset transfers for your family?
