As people live longer a new trend in inheritance is evolving: fast-tracking inheritances. In fact, 60 percent of people age 50 and older, in a Merrill Lynch study , said they would prefer to give sooner rather than later – so that they can help and see their children pursue their dreams.
Here are a few things you should consider.
Some of your children may prefer to wait for their inheritance, while others could benefit greatly from having the money now. For example, if your grandson’s startup requires seed money, giving him a portion of his inheritance now might make a lot of sense. You can gain valuable information by observing how he uses the gift and get the satisfaction of seeing him invest in his future. But consider, too, how other family members may feel about the gift, and what their immediate needs are. Explain the rationale behind your decisions. Transparency in your decision making process is an important part of protecting family unity. Talk with everyone, and make it clear that gifting now could affect how much they will receive later on, in your will.
Larger gifts, in particular, can bring unwanted responsibilities. If, for example, you give one child control of a trust — and discretion over distributions to other family members — could you be thrusting that child into an unwelcome position? Before gifting take an honest moment to consider if your heirs are prepared to take on the inheritance.
Before you give, determine what you need for the rest of your life — and make sure you’ve set those resources aside. Otherwise, you may shortchange yourself and the very family members you’re trying to help. You don’t want to put them in a position of having to support you later on.
Having an open and honest dialogue with the whole family can help set everyone up for success. Consider looping in a financial professional from the beginning to collaborate with your estate planning attorney to develop an inheritance plan that meets all parties’ financial goals.
For more information, contact The Menashe Morley Group in the Rancho Santa Fe office 858-381-8113. The Menashe Morley Group, serving the community for over 34 years: David Menashe is a Senior Vice President and Wealth Management Advisor, Bruce Morley CRPC ® is a First Vice President and Wealth Management Advisor and John Naviaux CPWA ® is a Vice President and Wealth Management Advisor. The investments or strategies presented do not take into account the investment objectives or financial needs of particular investors. It is important that you consider this information in the context of your personal risk tolerance and investment goals. Always consult with your independent attorney, tax advisor, investment manager, and insurance agent for final recommendations and before changing or implementing any financial, tax, or estate planning strategy. Merrill Lynch Wealth Management makes available products and services offered by Merrill Lynch, Pierce, Fenner & Smith Incorporated (“MLPF&S”), a registered broker-dealer and Member SIPC, and other subsidiaries of Bank of America Corporation (“BofA Corp.”) Merrill Lynch refers to any company in the Merrill Lynch & Co., Inc., group of companies, which are wholly owned by Bank of America Corporation. Investment products offered through MLPF&S and insurance and annuity products offered through MLLA: Are Not FDIC Insured, Are Not Bank Guaranteed, and May Lose Value. © 2017 Bank of America Corporation. All rights reserved. 1 Family & Retirement: The Elephant in the Room. A Merrill Lynch Retirement Study, conducted in partnership with Age Wave in 2013. https://mlaem.fs.ml.com/content/dam/ML/Registration/family-and-retirement/102497.pdf 2 See also Merrill Lynch’s Wealth Continuity and Family Unity: 10 Best Practices for Navigating Family Wealth With Intention. https://www.pbig.ml.com/articles/wealth-continuity-and-family-unity.html