Take
steps to ensure that the money you inherit will last and help you meet your
major financial objectives.
Inheritance planning involves
several tough decisions for the "giver" in the equation. Who shall
get an inheritance? How much should be given? Lots of thought goes into this
area of estate planning. But what about the heirs? Do they need a form of
inheritance planning too? Are they ready to be "receivers"?
Anyone can spend a buck and a
few can spend wisely. Nevertheless, only a few will have the forethought to
plan and make the most of an inheritance.
If an inheritance may be in your
future, then you ought to read a recent Morningstar
article titled “How to Plan for an Inheritance: 6 Things You
Need to Know.”
As the title suggests, there are
six things you need to know according to Morningstar
to make the most of the opportunity. While the original article goes into
more depth, here are the six things for you to ponder:
1. What kind of assets will you receive?
2. How will the assets be distributed?
3. Have you done your own financial planning first?
4. When you get the money, what are your priorities?
5. What are your obligations?
6. Is the inheritance transparent?
You can plan entirely on your
own assumptions, but that can be a tricky way to plan. This is where
communication is key – intergenerational communication.
It is a wise estate planner who
educates prospective inheritors regarding these “6 things” identified by Morningstar and likely even more. In the
end, planning for the transfer of an inheritance can be a family activity with
one generation giving to and guiding the next generation.
For more information and articles on
estate planning and elder law topics, please visit our website
and sign up for our free monthly e-newsletter. You can also friend
our law practice's Facebook page (R Christine Brown).
Reference: Morningstar
(August 30, 2013) “How to Plan for an Inheritance: 6 Things You
Need to Know”