After completing the probate process for a deceased relative’s estate, Florida residents will finally receive their inheritance dollars. They will also have to decide whether they will spend all of it, spend part of it, save it, give some or all of it away to a needy person or give some or all of it to charity.
Interestingly enough, statistics show that a third of Americans who receive an inheritance will spend all of it, while most will spend, donate or lose at least half and save half. This statistic becomes even more interesting when you realize that by 2022, the older American population will have transferred approximately $4 trillion in inheritance money to their beneficiaries. Indeed, over $2 trillion will soon be dumped into the economy by heirs who spend, lose or donate what they receive!
These inheritance spending statistics come from a survey carried out by Zagorsky in 2012. The study revealed that about 30 percent of Americans who received inheritance money had negative savings just two years later. The median inheritance in this survey was only $11,340, but the statistic is still worth noting — especially for Florida residents who plan to bequeath money to their heirs.
Knowing this information could inspire one to devise a trust that slowly doles out an inheritance over time if it is believed that the recipient is likely to simply spend it all at once. Still, it appears that the more money received, the less likely heirs are to spend it all at once. In the Zagorsky study, 40 percent of heirs who received $1,000 or less spent all of it. Meanwhile, only 18.7 percent of heirs who received $100,000 or more spent all of it.
What do you think your heirs will do with the money you leave behind? By discussing your concerns with a qualified estate planning attorney, you can devise an estate plan that fits you and you family’s needs, so that your estate is doled out in the manner you prefer.
Source: 247wallst.com, “A Third of Americans Blow Through Their Inheritanc,” Paul Ausick, Nov. 08, 2015