How to Pass Down a Large Inheritance and Not End Up With a Spoiled Beneficiary
September 13, 2012 By Purcell & Amen, L.L.C.
Knowing that you are in a position to leave behind enough money to provide for your loved ones when you die is a wonderful feeling. However,it can also be the source of concern though because handing over a large sum of money to someone can create as many problems as it solves.If you want to provide for a loved one without spoiling him or her, consider utilizing some of the following estate planning steps and tactics:
1. Don’t advertise what you are worth. Your loved ones probably have some idea what your estate is worth, but there is no need to confirm this.The less they know,the better for estate planning purposes.
2. Don’t give away details of your estate plan. Again,your loved ones may have some idea who will inherit from you when you die, but you are certainly not obligated to tell anyone how much they will be inheriting. Telling someone ahead of time can result in the beneficiary just sitting around waiting to inherit their inheritance instead of becoming a productive member of society.We call these people professional “wait-ers”.
3. Make use of trusts. A trust is an excellent estate planning tool for many reasons.You have the ability to appoint a trustee who will continue to oversee the trust funds and monitor the beneficiary long after your death so choose your trustee wisely.
4. Consider creating a specialized trust such as an educational trust or an incentive trust.These trusts allow you to tie the disbursement of trust assets to productive endeavors such as the completion of a higher education degree or the success of a small business.
5. Don’t give away all the inheritance all at once. Even relatively mature and financially responsible people can react poorly when handed a large sum of money all at once.The temptation is often too strong to go out and blow at least some of the money.To prevent his from happening,use a trust to stagger disbursements over a number of years.Start with a small disbursement and gradually increase the amount the beneficiary receives over the years.Not only does this give the money time to increase in value but it gives the beneficiary time to get acclimated the new wealth.
ABOUT THE AUTHOR: David Purcell
Experienced estate planning attorneys St. Louis MO of the Purcell and Amen, Attorneys at Law – Your Estate Matters, LLC offers estate planning and business planning resources to residents of St. Louis MO.
Copyright Purcell & Amen, L.L.C.
More information about Purcell & Amen, L.L.C.
Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.
2. Don’t give away details of your estate plan. Again,your loved ones may have some idea who will inherit from you when you die, but you are certainly not obligated to tell anyone how much they will be inheriting. Telling someone ahead of time can result in the beneficiary just sitting around waiting to inherit their inheritance instead of becoming a productive member of society.We call these people professional “wait-ers”.
3. Make use of trusts. A trust is an excellent estate planning tool for many reasons.You have the ability to appoint a trustee who will continue to oversee the trust funds and monitor the beneficiary long after your death so choose your trustee wisely.
4. Consider creating a specialized trust such as an educational trust or an incentive trust.These trusts allow you to tie the disbursement of trust assets to productive endeavors such as the completion of a higher education degree or the success of a small business.
5. Don’t give away all the inheritance all at once. Even relatively mature and financially responsible people can react poorly when handed a large sum of money all at once.The temptation is often too strong to go out and blow at least some of the money.To prevent his from happening,use a trust to stagger disbursements over a number of years.Start with a small disbursement and gradually increase the amount the beneficiary receives over the years.Not only does this give the money time to increase in value but it gives the beneficiary time to get acclimated the new wealth.
ABOUT THE AUTHOR: David Purcell
Experienced estate planning attorneys St. Louis MO of the Purcell and Amen, Attorneys at Law – Your Estate Matters, LLC offers estate planning and business planning resources to residents of St. Louis MO.
Copyright Purcell & Amen, L.L.C.
More information about Purcell & Amen, L.L.C.
View all articles published by Purcell & Amen, L.L.C.
Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.
