Overwhelmed by Their Inheritance, Many Inheritors Seek Guidance

Very often we discuss the manner in which comprehensive estate planning can allow an individual to ensure that after he or she passes on, they are still able to provide for the continued wellbeing of the loved ones and causes that were most significant to them in their lifetime. However, those on the receiving end, meaning the heirs and beneficiaries, often need guidance when they inherit assets, property or funds.

While receiving some sort of inheritance means that an individual may be able to enjoy more financial freedom, coming into any sum of money can at times feel overwhelming for some individuals in Los Angeles. Many grapple trying to understand how they should spend or manage the money that they suddenly came in to. Others will struggle to understand why they were left the inheritance, or if they even deserve to suddenly have this money.

One California man received almost $1 million from a trust fund when he turned 18 years old. He felt that this was a sum of money greater than he needed, so he sought guidance in understanding how to split the money without incurring tax consequences. He then divided the money -- after careful consideration -- three ways with his two best friends since childhood.

He says of his decision, "After a lifetime of growing up together and sharing our parents, we found ourselves in a really different position economically. That was something I didn't want and didn't feel needed to happen." This generous man is part of a small population of individuals that similarly wish to substantially give back when they come into large sums of inheritance.

While charitable giving is certainly a noble cause, it is also important to consider the ramifications of these decisions and plan ahead for costs and needs down the line before donating significant sums of an individual's inheritance. For many like the young man from California, there is room to donate a significant sum while still retaining an amount sufficient to provide for the inheritor's needs as well. Speaking with an experienced estate planning attorney can greatly assist an heir or beneficiary with all of these aspects following coming into a sum of modest or substantial funds.

Source: The New York Times, "Among Young Inheritors, an Urge to Redistribute," Paul Sullivan, March 25, 2013

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