Inheriting money would seem like one of life’s unabashed blessings: someone gives you a lump sum just for being you.
Surprisingly, what might seem such a blessing to some can, in reality, be just the beginning of a long list of emotional problems for heir that is ill equipped to handle the responsibilities associated with a large financial windfall. Then there is the possible adverse impact this new found wealth could have on relationships with family and friends.
The decision to leave wealth to your loved ones is easy; the real work is found in the ability to create the best plan for how to leave money for your loved ones so that your legacy is the blessing it should be. Can the loved on manage money; are they in a stable relationship; are their any special needs that must be addressed? Should you talk to your loved ones now about your plans and their future inheritance? If yes, then how and when should you talk about the matters?
Fortunately, The New York Times has addressed these circumstances with an article titled “What to Tell the Children About Their Inheritance and When.” However, it would be impossible for this article to answer these questions for you; the questions of if, how, and when to inform your heirs are solely yours to resolve. They are entirely dependent upon your and your loved ones’ unique circumstances.
Nonetheless, the article does provide firsthand accounts of others’ similar situations. It seems as if more and more heirs actually want to know what is going on, and some even need to know for various reasons. Either way, there are risks involved.
A sensible approach would be to seek the counsel of your estate-planning attorney who undoubtedly can provide experience-based insights. It is prudent to learn from the successes and mistakes of others.
Reference: The New York Times (July 20, 2012) “What to Tell the Children About Their Inheritance and When”