Expecting an inheritance? Implementing the right plan is essential. 

Estate planning is a critical part of preparing for your family's financial future. Over the next 25 years, an estimated $124 trillion in personal wealth is set to shift from older Americans to their heirs as part of the so-called Great Wealth Transfer.^[1] However, a multidecade study revealed that 70 percent of affluent families lose their wealth by the second generation, and 90 percent by the third.^[2] Responsibly planning for inherited wealth can therefore prove essential not only to protecting the legacy being left to you but also to ensuring financial security for your loved ones. 

The death of a beloved parent or grandparent can cause a whirlwind of feelings, including grief, guilt, anger, and even relief—and these emotions can make it difficult to think clearly. In such moments, it is reasonable that you may not be in the best position to make financial or estate planning decisions that could affect you and your family for years to come. 

Many people think of their inheritance as “found” money and may not be as conservative with a financial windfall as they would be with earned money. Poor spending choices, loans or gifts given to friends or family members, or failure to consider the long-term implications of certain financial choices could mean your inheritance may swiftly disappear. 

Regardless of the size of the inheritance you receive, an influx of newfound money or property can have a dramatic impact on your personal and financial circumstances. When handled thoughtfully, the inheritance can honor your loved one's legacy and meaningfully improve your life. Without proper preparation, however, you could find yourself facing challenges such as unexpected tax payments, ill-advised purchases, and even potential creditor issues. 

The best kind of inheritance planning starts with an open conversation between you and your loved ones before they pass. Broaching such a sensitive subject is never easy, but doing so can shed light on their wishes and make planning your financial future easier. Asking your loved ones while they are still alive and well about what they envision for passing down their money and property allows you the opportunity to gain a better understanding of their hopes for your future and their intent in leaving an inheritance to you. 

Before making any major decisions, consult with us to discuss the type of assets you are expecting to inherit (for example, financial accounts, real estate, business interests, vehicles) so that you can put a proper plan in place now. Keep in mind that the type of asset you will inherit matters: Inherited real estate may be handled very differently than inherited stocks and bonds, retirement accounts, or life insurance proceeds. After reviewing the estate plan of those you will inherit from, your team of trusted professionals can help you understand when and how you will receive your inheritance—whether all at once, in installments, or according to another distribution scheme. They can also advise you on appropriate investment strategies; ways to best protect your inheritance from your creditors, potential fraud, or divorcing spouses; and potential tax implications. 

If you are expecting an inheritance or your financial picture has suddenly changed, call us so we can help you plan for your goals and dreams while preserving your generational wealth.