Not everyone is ready to handle inheriting a lump sum of money. This is especially true of young people that don't have the life experience to appreciate the value of money and haven't acquired the skills to manage money. Many inheritances disappear in the matter of a couple of years or even in a matter of months.
Anyone inheriting money can look up a year later and realize that the money is gone and they don't know where it went. This is especially true for younger people. I knew a young man that received over $250,000.00 on his eighteenth birthday. Within 18 months it was all gone and he had nothing to show for it. The money went to a car that was totaled, to computers that were old tech within a year, to parties, to trips, etc. In the end all he had to show was some debt.
Even if you are leaving a small inheritance you can make sure that when it is used there is recognition of where it came from. We call this an "I Love You Trust." Basically, it is a trust that allow the beneficiary complete access to the money. However, when they spend money from the trust they know where it came from. So even if the beneficiary is very well off, when the use the trust money for a family vacation they know that mom and dad did that for them. Much better than mixing it in with their checking account and not knowing what it was used for.
On the other extreme, if there is a beneficiary that could never handle and inheritance on there own, a trust can be put on lockdown. This type of trust would only give the beneficiary access if an independent trustee agreed.
Between those two extremes are lots and lots of options for allow different levels of access to the trust assets.
After you have read this post, go to your favorite search engine and search "wasting inheritance" or "wasted inheritance." You will see scores personal stories from people that wasted their inheritances. You don't even have to click on the links, the search result summary should be enough to paint the picture for you.
If you'd like to learn more about protecting the inheritance you leave, let's talk about it, just schedule a complimentary Strategy Session with me.
Father, husband, entrepreneur, and owner of a trivia filled brain. I help families and individuals plan for the unexpected and end of life. Schedule a Complimentary Strategy Session to chat with me, get answers to your questions, and find out about your Estate Plan options.
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