Receiving a large inheritance can be an unexpected windfall or curse to your beneficiaries. If you share these concerns, what are your options? Are there alternatives to a large, lump-sum inheritance that are worth considering? To avoid a negative outcome, it is not uncommon for individuals to evaluate alternative methods to transfer wealth to their beneficiaries.
According to a recent U.S. Trust survey only thirty-two (32%) percent of baby boomers are confident their beneficiaries are prepared both emotionally and financially to receive an inheritance. Their concern stems from the desire for their beneficiaries to learn about hard work, failure and the joys of success and concern over their ability to handle sudden wealth.
The first step is to think about your concerns about creating an inheritance for your children and the issues that they may face. That means thinking about how they as individuals would react to sudden wealth. Would it be an opportunity for your children to prosper? Or would it open the door to dangerous outcomes?
The second step is to realize that there are many alternatives to a traditional legacy. It is important for the benefactor to take into account the full reality of a family’s situation and think through every option. You do not need to feel compelled to commit to a onetime, lump-sum wealth transfer. There may be powerful arguments against giving too much, too soon.
As well as family considerations there are also financial and tax strategies to consider as well. A thorough review will encompass financial planning; tax and legal issues; as well as a client’s goals, hopes, dreams and family realities.
Norton Hammersley’s estate planning, estate administration and asset-preservation practice assists individuals in pre-death planning for the distribution of assets prior to and at death. We assist personal representatives and trustees in carrying out their duties to creditors and beneficiaries.
Our estate planning and administration services include preparation of last will and testaments, trusts, irrevocable trusts such as insurance and charitable trusts, powers of attorney and living wills; tax-planning services, including the analysis of methods for reducing income and estate taxes and preserving family assets; business succession planning and asset protection planning; legal services and counseling requested by personal representatives, trustees and family members in settling estates and in the administration and distribution of trusts; and tax services in connection with the preparation of federal estate-tax returns and representation during audit.
For more information on Norton Hammersley’s estate planning, estate administration, and asset-preservation services, please contact Sarasota Estate Planning Lawyer John Compton or Sarasota Estate Planning Attorney E. John Lopez.