How to Plan for Receiving an Inheritance

8:49 pm Asset Protection, Estate Planning, Tax Planning, Wills

money gift 2 e1316545217983 How to Plan for Receiving an InheritanceIt is estimated that the next few decades will see the largest transfer of wealth in history in the form of inheritances.  Planning for receiving an inheritance is imperative if you want to protect assets to come and even pass them along to the next generation.

A recent Morningstar article details the things you need to know about inheritance planning:

The type of assets you will receive.  You may be inheriting real estate, an art collection, cash, stock, retirement accounts or a combination of all of these.  But whatever you will inherit requires some tax planning so you don’t incur unnecessary capital gains or estate taxes.

How the assets will be distributed.  If the assets are not being transferred via a trust, this could trigger some taxes as well.

Do your own estate planning first.  Many financial experts caution people against waiting on an inheritance before they create their own estate plan.  What would happen to the inheritance if something were to happen to you first?

Set your priorities.  If you already have an estate plan, you have likely established your financial priorities.   Working with an estate planning attorney or financial planner to determine the best use for your inheritance before you receive it is a better option than waiting until it arrives.

Determine other obligations.  Maybe you don’t need the entire inheritance to meet all your priorities, but your children could use the money.  You should have a plan that addresses what will happen to the inheritance after you receive it, including any obligations you want to fulfill to other family members or a favorite charity.

For additional information on creating an estate plan and protecting the assets you have now as well as what you will receive via an inheritance, contact our Newport Beach law firm.

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