Doing your estate planning should give you peace of mind that you’ve done everything possible to set your loved ones up for success. But the receipt of a sudden large amount of wealth can cause more questions than originally anticipated, and advanced planning and conversations on your part can make things easier for your loved ones.
Sitting them down and explaining what property you plan to pass on and giving them various options to understand how best to plan for it or the experts they need to communicate with to create a strategic plan is vital. Sudden wealth can bring unexpected financial problems like scams, tax implications or investment pitfalls. Setting long-term financial goals is an excellent first step for someone who expects to receive a substantial inheritance. This helps lead them towards an educational and researched approach to how they spend or save the money.
You may also wish to point your loved ones in the direction of hiring a professional advisor even if that is a different team of professionals than you took on yourself. Tax specialists, estate planning lawyers and financial advisors can all provide important guidance in managing sudden wealth. The third thing to discuss with your loved ones is creating a realistic spending plan.
This helps to avoid impulse purchases that spend through the amount left aside for them far too quickly, and by having a clear understanding of the finances and goals can help to prevent overspending. The more planning you do with your estate plan, the easier it is for your loved ones to be successful in the future.
Let our Pasadena estate planning attorneys assist you with the process of setting up your estate plan.
