Inherited Wealth – A Blessing Or A Curse?

Despite the bitter economic downturn, one part of the American dream is alive and well: the possibility of sudden wealth… Yet such life-changing windfalls can just as quickly vanish, say advisers who work with those who suddenly become wealthy. 

If you are setting up an inheritance for the next generation, or if you yourself may be an inheritor, here’s an important (if depressing) fact to consider: more often than not, immediate wealth is easily (and quickly) squandered.FlyingdollarJPG

A recent Wall Street Journal article points out the trend, and whatever your present relation to the estate planning process, it’s an important fact to consider.

When you think of squandered wealth it’s all too easy to come up with stories of professional athletes and 15-minutes-of-fame pop-stars. Regardless, famous people are no better and no worse than the rest of us. In reality, this problem can affect anyone with some sudden influx of wealth, perhaps especially an inheritor.

In fact, there are some objective numbers to support this assertion. According to the latest available data from the Federal Reserve's Survey of Consumer Finances, more than nine million households in the U.S. reported getting an inheritance of at least $100,000. And, looking to the future, the Center for Retirement Research at Boston College estimates that baby boomers – those 78 million people born from 1946 through 1964 – are expected to inherit some $8.4 trillion during their lifetimes. In turn, these boomers are just as likely to hope to pass it down immediately. These handoffs make for a large margin of error, both as individuals and as a society.

As an inheritor, the challenge is to be the “exception” and that will take work. As an estate planner, giving up wealth here and now, there is still work to be done and it is all the more pressing! Properly planning and transferring wealth to your loved ones is about planning for the entire process – the long-run – and the future well being of your family.

It’s important to know and understand the ways you can plan to protect your inheritors, and there are many tools available once you understand this goal. Often, you’re protecting your inheritors from themselves.

You can learn more about estate planning in the Estate Planning Practice Center on our website. Be sure to sign up for our free e-newsletter to stay abreast of issues like these that could affect you, your loved ones and your estate planning.

Reference: The Wall Street Journal (February 25, 2012) “Too Rich, Too Soon

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We've been putting together as many resources as possible so that we can continue to help:

  • If you’re a current client with a signing appointment or a prospective client with a consultation and would prefer that meeting take place in your own home, we can accomplish that with a little bit of pre-planning on our part and with the addition of a laptop, smartphone, tablet or other computer in your home to facilitate this virtual meeting. For those of you that need to sign legal documents, that too can be accomplished with the use of a webcam (FaceTime etc.), so that we can witness and electronically notarize all of your important legal documents.
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Update to our Process

The unprecedented coronavirus pandemic has taken our entire country by surprise. We understand how difficult this time is for America’s businesses and families.  However, we believe it is vitally important that we make every effort possible to continue to offer solutions that avoid disrupting our important partnership with you, your family and friends.  As you know, estate planning is not something that should wait for a more convenient time, therefore the opportunity to address your important goals both during and after this crisis should not wait.  To that end, we have added the option of a ‘virtual consultation’ to our office process.  You will now have a choice of either meeting with us in our office or in the comfort of your own home.