Planning for an inheritance can be thorny. You can be consumed by unrealistic ideas and
make a number of missteps that could reduce the value of what you receive over
time. Taking a few preparatory steps can help ensure that the money will last
to meet your major financial needs.
We tend to think and talk about how hard it can be to plan to give away, bequeath, or otherwise disseminate your estate. After all, you have so many personal, financial, and legal variables to consider. On the other hand, being on the receiving end of an inheritance can be just as challenging.
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 fut-ure, 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:
- What kind of assets will you receive?
- How will the assets be distributed?
- Have you done your own financial planning first?
- When you get the money, what are your priorities?
- What are your obligations?
- 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.
You can learn more about this topic as well as other strategies on our website under
the tab entitled: estate planning in Virginia. Be sure you also sign up for our complimentary e-newsletter so that you may be informed of all the latest issues that could affect you, your loved ones and your estate planning.
Reference: Morningstar (August 30, 2013) “How to Plan for an Inheritance: 6 Things You
Need to Know”