An inheritance is a bittersweet thing to receive. It means that a loved one has passed. It also is their last gift to you, and often a gift of great potential.
Making the best of an inheritance begins with recognizing the gift and its potential as something worthy of careful consideration. For some thoughtful counsel, consider reading a recent Kiplinger article titled “Heirs Should Treat Windfall With Special Care.”
There is simply much to be done, and much that can be done, but not all of it need be done at once. For example, you might begin the process by asking yourself some questions worthy of the gift and worthy of reflection. How was the inheritance received? What is the form of the inheritance, cash or illiquid assets? Are there any limitations or restrictions regarding the inheritance?
In addition to these questions, determine whether the inheritance must be protected and preserved. For instance, is personal liability or property insurance required? Will a new account need to be opened, especially if the inheritance is to continue in trust? Should the assets themselves be repositioned or restructured? Will you be passing them along as well?
In short, a windfall inheritance is and ought to be a moment of reflection. It can be difficult, but the moment of reflection may be rewarding and prove invaluable in itself. In point of fact, families need not wait until the windfall itself to consider their options and their future.
Part of estate planning is doing what is best for the next generations. Now that you have received the inheritance, how will you plan for the next stewards?Consequently, that fact alone may require working with you loved ones from the beginning, and well before the inheritance you leave, to ensure all is in place and aligned when needed.
If you are planning for your own estate, then how would you want your loved ones to treat their inheritance? What can you do today to ensure that they receive the greatest good from your largesse tomorrow? A little bit of planning on your part in coordination with your loved ones - and your estate planning attorney - can keep the family strong in the process, too.
Remember: “An ounce of prevention is worth a pound of cure.” When making your financial, tax and estate plans, do not go it alone. Be sure to engage competent professional counsel.
For more information about estate planning in Overland Park, KS (and throughout the rest of Kansas and Missouri) and to download free tools to help you organize your estate, visit my estate planning website.
Reference: Kiplinger (February 2014) “Heirs Should Treat Windfall With Special Care”