Preparing Heirs for Transfer of Inheritance

The transfer of wealth can bring a host of concerns and headaches. Heirs may be unprepared to handle the responsibility of managing their newfound assets, whether those are investments and cash or business ownership interests. Read on for tips on how you can ensure your heirs are prepared to receive your inheritance upon your passing. Call an experienced forensic genealogist for professional assistance in identifying the proper heirs to an estate.

Keep Your Documents Organized

It’s incredibly helpful if you keep all of your key documents in one place, whether it’s a home office or stashed with a particular representative, such as an estate planning lawyer or accountant. When your family is already dealing with the emotional and practical challenges associated with losing a loved one, the last thing they want to do is go on a scavenger hunt looking for the most recent draft of your will.

Make sure you have your will, trust documents, deeds, powers of attorney, insurance policies, and other key documents in an easily accessible place. Make sure your heirs know where that place is. If you have a particular legal or financial representative who handles your affairs, make sure your heirs know who it is, so they know who to contact after your passing.

Inform and Involve Your Heirs in the Planning Process

When you start your estate planning process, consider involving your heirs. By maintaining open communication, you can make your intentions clear and avoid the pitfalls of probate and familial disputes. You’ll avoid concerns regarding undue influence by certain family members or caretakers. Everyone will know where you stand, and they’ll feel more compelled to respect your wishes.

You can also solicit opinions from your heirs so that they feel involved in the process. You’ll get additional insight and ideas, and you can craft your inheritance plan to better serve the realities of your family. If you are transferring a large investment or ownership of a business, it’s especially important that your heirs know what to expect in order to prepare properly.

Help Them Create a Plan

Inheritance can mean a sudden influx of more money and assets than your heirs are prepared to handle. Work with them to plan for wise use of their newfound wealth. Help craft a plan to eliminate debt, invest wisely (index funds, purchase a reasonable home, utilize a financial advisor, etc.), save for higher education, and make other sensible decisions. As a rule of thumb, encourage them to save most of their inheritance. If they are young or otherwise unused to having such significant assets, it’s important to make sure they are prepared.

Consider Trusts

Trusts can be used to transfer assets to heirs while avoiding problems with taxation, creditors, and probate. Special types of trusts can also help you deal with issues specific to your family and your circumstances.

For example, if you are concerned about transferring too much all at once to a given heir, a trust can help. A trust can be used to disburse interest and benefits to a beneficiary over time rather than to transfer all of the assets all at once. This is known as a spendthrift trust.

You might, for example, set up a trust that supports a child or grandchild financially until they reach age 18 or 21, at which point they will receive the remainder of the trust’s principal assets. The assets will be managed and distributed by a trustee in accordance with the trust’s guiding documents. With such a trust, you can support your heirs financially without worrying that they will squander their inheritance or lose the assets to creditors, and you can avoid problems that may arise in probate.

Work With an Advisor

A trusted financial planner can work with you to establish your plan for inheritance while also ensuring your family is cared for every step of the way. Talk to your financial advisor about how to communicate with your heirs and raise financially responsible children, and consider having your family discuss matters with your advisor as well. The advisor can work to build your plan, advise your heirs, and ensure everyone is on the same page.

If you’re an estate administrator in need of experienced assistance identifying and locating missing heirs to an estate, help with determination of heirship proceedings, or heir research services in order to satisfy due diligence requirements, contact the thorough and comprehensive forensic genealogists at Von Langen, LLC at 561-748-2936.