Financial Planner for Inheritance and Wealth Transfer

Financial Planner  for Inheritance and  Wealth Transfer

If you have recently been the recipient of an inheritance, you are witnessing the beginning of the largest transfer of wealth the world has ever seen.  The wealth earned, saved, and invested by baby boomers has begun to find its way into the hands of their heirs – their children, grandchildren and designated charities.

The Importance of Making Wise Choices Surrounding Inheritance

Many households in this position know instinctively that they must have some form of plan to manage and invest this wealth because they want to be good stewards of the gift and help improve their lives as the donors intended. But, they are uncertain what exactly good investing practices look like and, furthermore, they have no one they know and trust to assist them.

Research data emphasizes the need. A staggering 70% of families lose this wealth during that second generation and 90% lose it by the third!¹ Furthermore, a significant contributor to this loss is that it is unfortunately not unusual for there to have been little household instruction on managing and growing that wealth. Thus, the wealth is gone and only regret remains.

Financial Planning After an Inheritance

Wellspring Financial Partners is dedicated to preserving and growing your inherited wealth, so you can live comfortably and potentially leave a legacy for your heirs. Through a carefully crafted financial plan with your Wellspring advisor, using top investment strategies, you can confidently enjoy your life now and better prepare your loved ones for their future.

Financial Considerations for Wealth Transfer Recipients

It’s important to understand that the financial situation for each individual or household is different. Getting personalized, specific financial advice helps set you up to make the wisest possible decisions for your needs. The principles below may be relevant to your situation, and can be helpful to start thinking about prior to meeting with an advisor.

Managing Emotions

There are many practical considerations after receiving an inheritance, but there is also an emotional dimension. After all, an inheritance is, by nature, tied to a loss, and you are likely navigating complex emotions. It’s difficult to cope with grief under any circumstances, and when you add money into the mix, the situation becomes more complex. It’s important to slow down and consider working with a professional to help you make impartial decisions around the practical matters related to your inheritance. This also gives you an opportunity to focus on your own emotional healing.

Tax Implications

Taxes are one of the primary considerations for recipients of inheritances, and are often one of the most difficult to navigate on your own. There are different tax treatments that apply to the various asset types that could be involved in this wealth transfer. Examples include required minimum distribution (RMD) rules for inherited individual retirement accounts (IRAs) and taxes on investment assets. How you navigate these considerations can have a significant impact on your finances, and there are also legal implications to consider.

Inherited Property

In addition to inheriting investments and liquid assets, you may also inherit property, such as a home. This brings additional choices, including whether to sell, rent, or keep the property. Each option comes with different tax implications, financial considerations, and, in many cases, emotional impacts. Your financial advisor can help you navigate this situation, providing guidance and advice about the benefits and trade-offs of each option.

Probate Process

Probate is the legal process through which an estate’s assets are transferred to inheritance recipients. Although many people may think that they will receive an inheritance immediately, the truth is that probate often takes several months or even longer. The more complex the estate is, the longer the process is likely to take. This gives you the benefit of more time to plan how to handle the funds and assets, but it can also introduce an element of anxiety. Working with an advisor can help you stay on track throughout the process.

Fiduciary Inheritance Advisors

At Wellspring, our advisors have a fiduciary responsibility to our clients. This means we are legally obligated to act in your best interest. During the wealth transfer process and beyond, it’s immensely beneficial to have someone on your side that you can trust in this way.

If you are the recipient of an inheritance, contact us today to learn how we can help you.

1. MarketWatch, July 16, 2020

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Financial Planner for Inheritance and Wealth Transfer

Financial Planner  for Inheritance and  Wealth Transfer

The Importance of Making Wise Choices Surrounding Inheritance

Financial Planning After an Inheritance