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April 14, 2017 | Posted in:

Time for a Family Discussion About Inheritance

Full disclosure finances: Be honest and up front with your family members about potential inheritance.

 
Nobody wants the kind of surprise Joan Crawford left her adopted children at the end of her life in the movie “Mommie Dearest” — no inheritance. Of course, inheritance shouldn’t be expected or relied upon, but because it’s so rarely talked about, few people know what to expect. As it turns out, while some families discuss other end-of-life issues, very few talk about the details of inheritance. According to a recent study of 2,700 American adults, only 21% indicated they knew how much they would receive.

So, why do families avoid this discussion? Beyond the obvious that death is a difficult topic, the reasons vary. Often those leaving an inheritance are concerned they are not on track to leave as much as they would have liked, while some do not have an estate plan in place. Another source of concern is that their heirs don’t have realistic expectations about the amount they’ll receive. And, of course, money decisions among family members can cause tension and disagreements that are already exacerbated by the prospect of losing a loved one.

Experts recommend that families sit down together and have an honest discussion about the potential inheritance. Despite how difficult it can be, older family members (parents, grandparents) need to be candid about the amount they plan to leave so that their heirs can incorporate this amount into their own financial planning. In addition, informing family members of the details means there won’t be a surprise when the estate is distributed. If the benefactor does not have an estate plan already in place, the family can discuss working with an attorney to have one prepared.

Discussing end-of-life issues is never comfortable, but seeking the financial advice of an accountant, financial advisor, or attorney might be a way to ease the tension for your family.
 
 
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The information contained in this newsletter is of a general nature and should not be acted upon in your specific situation without further details and/or professional assistance. For more information or for assistance with any of your tax or business concerns, contact our office at 856.667.4100.
 

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