I Received an Inheritance. Do I Need to Update my Estate Plan?

If you have recently received an inheritance, you might need to update or create an estate plan. It depends on many circumstances. In this article I will discuss a few ways that receiving an inheritance can effect your estate so that you can better determine whether it is necessary for you to make changes.

No Estate Plan, Will, or Trust

If you do not have an estate plan in place and have recently received an inheritance, you should discuss creating a plan with a professional right away. Receiving an inheritance can subject you to new types of taxes and administrative fees. Likewise, you need to make good investment decisions. While an estate planning professional is an attorney and typically will not help you invest your new inheritance, the attorney should be able to refer you to an advisor that they trust to help. Further, the estate planning attorney should work together with that advisor to make sure the plan is reflected in the way the assets are invested.

Existing Estate Plan, but assets have Significantly Increased due to the inheritance.

If the inheritance was significant there are many potential pitfalls to receiving this money. One pitfall is that receiving this inheritance may make you a better target for lawsuits. If you consult with an estate planning attorney, they should be able to advise you on how to protect your assets from potential suits. There are also wise investment strategies that need to be leveraged to protect your assets from potential suits. Again, your attorney and your financial advisor can work together to make sure your wishes are carried out when it comes to asset protection.

Your Loved Ones Had Strong Convictions

Often wealthy individuals have strong convictions about how their money was used while they were living. Beneficiaries can honor their loved one’s memory by using the money in ways their deceased loved one would have wished those assets to be used. Many who have acquired wealth have done so because they are thrifty.

A beneficiary could honor their deceased loved one by planning carefully with these assets. This is a difficult thing to do over multiple generations. Studies have shown that only 70% of wealthy families in the United States are still wealthy into the next generation. Further, these studies have shown that more than 90 percent of these families lose the wealth into the second generation. Wise estate planning can increase the odds that a loved one’s thrifty spirit lives on to bless the lives of their family for generations.

Also, a deceased loved one may have been charitable during their lifetimes. Wise estate planning can allow a beneficiary to honor their deceased loved one by giving to charities in a way that saves taxes and preserves the wealth the loved one gifted to them.

Seek Help

Often mistakes with investments and estate planning are discovered after it is too late to fix them. You should seek the help of a professional so that you do not mismanage the gift your loved one left to you. You can call us at (951)304-3431 and we can help you with your estate planning needs or we can recommend you to a great financial advisor.