According to the Bureau of Labor Statistics, about 30 percent of households in this country will inherit wealth. The question is: how many people are prepared to manage it to its best advantage? Not only is effectively utilizing money in the day-to-day important, an estate plan for protecting it into the future is critical. Florida families in this situation have a lot to consider either way.
There can be significant life changes for those who inherit a large sum of money. On an emotional level, there is the loss of the loved one that precipitated the windfall in the first place. This can lead to reactions that run the gamut from sadness to excitement at the new financial opportunities ahead. It can be particularly daunting for couples to sort out how this newfound money will change their family dynamics.
Heirs who are inexperienced at investing money or making wise budget and savings decisions would benefit from doing nothing immediate. It is reported that nearly two-thirds of people over 60 expect to leave money and property to their children. It is not unusual for these parents and children to avoid discussing the topic, but experts say it is very helpful to discuss money management and expectations ahead of time. Working on decision-making skills with those who have acquired the wealth in the first place can be a very smart plan.
After handling the necessary business such as closing accounts, paying bills and meeting estate administration needs, then it’s time to starting considering an investment strategy, giving gifts or making other plans. Experts suggest at least six months or a year should pass before contemplating these choices – longer for big decisions.
Becoming overwhelmed can be avoided by slowing the pace. Rash decisions based on emotion are easily made without the calm consideration of knowledgeable advice assisting the process. Once initial management of the estate probate and distribution of assets is complete, wealth protection and the next generation of estate planning can secure the inheritance survives and grows.
Source: Dailyfinance.com, “Inheriting a Windfall: How to Handle Sudden Wealth” Deborah Nason, Nov. 25, 2013