If you’re the child of a parent or grandparent who’s planning on passing on the family wealth, it’s important to be prepared for their death. The good news is that there are steps you can take now to get ready for inheriting money. Here are some tips.
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The Conversation On Inheritance Can Be Difficult To Have
The conversation on inheritance can be difficult to have. It’s a sensitive topic, and at times it can feel more like a personal conversation than one that is business-like.
But getting prepared for your inheritance requires serious planning, so don’t let the awkwardness of discussing an inherited treasure get in the way of your long-term security.
If you’re looking for help with preparing for an inheritance, there are professionals who will guide you through this process. A good advisor or lawyer can give advice on how best to manage inherited assets and ensure that they’re protected from taxes and other liabilities as well as put them into investments that will grow over time.
For example, if you are looking for information on how to find a will in Florida, you can use this website to find the best attorneys in your area. You can also find information on how to prepare for an inheritance, whether you’re expecting one or you’ve already received it.
Establish Your Goals
Before you begin planning for your inheritance, it’s important to sit down and think about what you want to accomplish with it. What are your dreams and aspirations? What are your financial goals? How will this money help support those goals and allow them to thrive? What does wealth mean for you personally?
When creating a plan for the future of any kind of wealth transfer (inheritance or otherwise), it’s crucial that all members of the family have a chance to work out their feelings around these issues. No one wants an inheritance from someone who has passed away if they don’t know how they feel about them in the first place.
Setting aside time for open communication can help ensure everyone has an opportunity to express themselves honestly before any big changes take place—and even if it doesn’t solve every issue right away, it will make everything easier once decisions have been made.
Think Through The Timing
When do you expect to receive the inheritance and how long do you think it will last? If the money is coming in slowly, then you should be able to live off of it for a long time. But if it’s coming right away and may even exhaust itself quickly, then this is a good time to look at putting some of those funds into savings so that when that happens, there’s still some money left over.
Think about what your basic needs are (food and shelter) as well as any other expenses or wants that must be met first before saving any money. Then make sure there’s enough left over so that your savings goal is within reach but not easily achieved by just stopping spending altogether for a month or two without having to cut back on anything else important like housing or food costs.
Consider The Tax Implications
Taxes are a big factor in how much you get. The tax laws are constantly changing, so it’s impossible to know exactly how your inheritance will be taxed until you receive it. However, if you’re receiving an inheritance from someone who died recently or who was in the same bracket as you during their lifetime, consider that taxes can be a significant portion of what they leave behind.
Consider whether the transfer of wealth might affect your tax bracket. If the amount of money involved is significant enough that there’s any chance it could change your tax bracket for the year (in either direction), then this is something worth considering before deciding how (and when) to use some or all your inheritance.
Think About Potential Family Dynamics
When it comes to thinking about your family, you may want to consider three things:
- Who is going to get what? This is the first and most obvious question. If there isn’t a will or trust that provides for an orderly distribution of assets, then state law will control this process.
- What are their needs? When we think about giving money or property away, we often do so with an eye toward helping our loved ones. But sometimes, especially if there are blended families involved or other complex relationships in play, giving away wealth can lead to unintended consequences—like hurt feelings and resentment among family members who feel left out or overlooked by one another.
- Is this really what I want my family members to have? Because ultimately you may be unable to dictate exactly who gets what from your estate. You might think that all your cash would go straight into College Fund #1 with one child if he or she were old enough right now, but such planning would likely create some awkward conversations between siblings when they all start learning how much each other has gotten (or not gotten).
The process of preparing for your inheritance should be an exciting opportunity to think about how you want to spend your time and money, as well as what kind of legacy you want to leave behind. If you’re reading this article because you have inherited some money or property and are not sure what to do next, we hope these tips will help get you started on a new life without changing your future plans on that windfall.