How to handle an inheritance always requires a thoughtful game plan but it is a topic that can be too easily set aside to be dealt with in the future.
An inheritance can be a blessing or a curse. Proper planning, however, can tilt the odds in favor of the former, rather than the latter.
“Inheritance.” The word alone is packed with emotion. Whether you are planning to leave an inheritance or planning to receive one, there are weighty considerations to be made. In fact, the prospect of an inheritance presents the perfect opportunity for significant intergenerational dialogue about the family wealth.
If you are looking for some practical guidance about how to manage an inheritance, a Forbes article offers some timely advice. The article, titled “How To Manage An Inheritance,” suggests four matters every prudent inheritor should consider regarding his or her inheritance: Make it a part of your plan; Don’t ignore retirement accounts; Have a tax plan; and Disclaim.
Interestingly, the last of the four considerations, Disclaim, actually involves “giving up” the inheritance in whole or in part before you actually inherit it. To effectively disclaim an inheritance (or a gift), there are and specific steps you must take. As with any complex estate and tax issues, always engage competent legal counsel early rather than later.
Reference: Forbes (April 19, 2012) “How To Manage An Inheritance”