Inheritance

Just like other important life tasks, your estate plan deserves your time and attention. It’s important that you work with us to review your estate plan at least once a year. Think of this as your estate plan’s annual physical exam, and remember—prevention is the best cure.

An annual exam isn’t necessarily the only time we see a doctor. Similarly, an annual planning meeting isn’t the only time you need to consider your estate plan. The occurrence of special life events may mean it is time to pick up the phone and call us.

If you experience any of these significant life events, get in touch with us, and we’ll make sure you are up to date.

Why would anyone want to refuse an inheritance? Although it is surprising to many, there are several circumstances when declining an inheritance can be beneficial. The law does permit you to refuse an inheritance if you comply with certain strict requirements. The legal term for a refusal of an inheritance is a “disclaimer,” which is defined as an irrevocable and unqualified refusal to accept an interest in property.

Studies have shown that 70% of family wealth is lost by the end of the second generation and 90% by the end of the third.  Don’t let your loved ones become part of these statistics. You need to understand, and work to overcome, the disconnect that occurs between generations regarding the transfer of wealth.  In this issue you will learn:

• The main factors that contribute to family wealth loss over the generations.
• How you can overcome your reluctance to discuss your wealth with your loved ones.

 Whether you have accumulated a little or a lot of wealth over your lifetime, it is likely that you have some particular thoughts on how you would like those assets to be used by loved ones after your death. Maybe you would like the assets to be used as a down payment on a home, be applied toward college tuition, or fund a dream vacation.  Unfortunately, without specific guidance from you, money that is left outright to your loved ones probably won’t be used the way you would like. For these reasons, and many more, leaving a delayed inheritance may be the best option.

Benefits of Delay

There are several reasons not to leave an outright distribution to your loved ones.
Read more . . .

Unfortunately, sometimes a death in the family can bring out the worst in people. Indeed, family resentments sometimes simmer during a time of grieving - particularly when money and assets from the deceased’s estate are involved. If you are a beneficiary under a loved one’s estate plan, you may be under the assumption that those assets will be distributed according to his or her wishes. Inheritance theft, however, is an underreported problem that can cost families dearly. Moreover, the theft can be perpetrated by someone who was highly trusted by the decedent - the executor, who is the person typically chosen by the decedent to manage the estate upon his or her death or incapacity.
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Shocking to most people, the retirement account you leave for your spouse can be seized in a divorce, lawsuit, or bankruptcy.

3 Options Available To Surviving Spouses

When your surviving spouse inherits your IRA, he or she generally has three options:

1. Cash out the inherited IRA and pay the income tax.

   WARNING! The cashed-out IRA will not have creditor protection and accelerates taxation.

    

2. Maintain the IRA as an inherited IRA.

   WARNING! The inherited IRA will not have creditor protection.
   Read more . . .
   
   

Do you have IRAs or other retirement accounts that you plan to leave to your loved ones?  If so, proceed with caution.  As opposed to when you own the retirement accounts, inherited retirement accounts do not have asset protection, meaning they can be seized by creditors.

How Can Inherited IRAs Be Protected?  Enter the Standalone Retirement Trust

Fortunately, retirement accounts can be protected but only if you take action.  Many people like you are using Standalone Retirement Trusts (SRT) to protect retirement assets.  The SRT is a special type of trust just for retirement accounts.
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When it comes to estate planning there are several types of tools you can use, depending on your circumstances. One such estate planning tool is the trust. There are numerous types of trusts aimed at fulfilling different estate planning purposes. If you are anticipating an inheritance, there is a special type of trust designed to help protect it: an inheritor’s trust.

Purpose of an Inheritor’s Trust

An inheritor’s trust is a trust that has been established for the purpose of receiving a beneficiary’s inheritance in a way that is protected legally and financially.
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Receiving an inheritance is a huge blessing but, if not handled properly, can also become a curse. Often times, the inheritor does not know what to do with the new asset and runs into financial trouble, squandering most, if not all of it. This could happen due to the inheritor having outstanding creditor issues or tax troubles or being inexperienced with managing the new assets. No matter what the financial obstacles maybe, estate planning can help address or even eliminate these issues. For these reasons, it is vital to update your estate plan - or create one if you have not already - if you have received or are expecting to receive an inheritance.
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