Inheritances Can Be Painful

Giving while living is ideal, no doubt. When that is not possible, the subject of inheritances and wealth transfer can be complex and gut wrenching for some. Without careful planning, conditions may become ripe for wealth destruction. Your wealth will transfer, just maybe not where you intended. Unless you’re okay with your life’s assets enriching litigation departments of probate law firms you’ve never met, or forensic accountants you’ve never heard of, now is a good time to question your current wealth transfer plan. Will it do what you hope it will do? Does it protect your business, your assets or your children from suing one another or worse, never speaking to each other again?

Do you have enough liquidity built into your plan? Our experience suggests that most plans do not have a sufficient amount of income tax free and estate tax free liquidity. There is nothing like an infusion of cash into an estate. Depending on many factors, it might not be optimal timing to transfer a business or liquidate real estate holdings. Too often, death happens at the worst possible time. In cases with an insufficient amount of life insurance, problems arise. Alternatively, a liquidity injection always gives the planning professionals time to maximize value, not appease beneficiaries. Don’t let an adviser minimize the value of life insurance proceeds upon death. You may hear, “you’re so wealthy, you don’t need life insurance”. Or, “your assets won’t exceed the $22,000,000 exemption level so there is no need”. This may be true but these advisers miss the point. It’s not about need at this stage. It’s about proper execution and ensuring that your wealth ends up as a blessing in the lives of your heirs.

A wealth transfer plan without sufficient liquidity opens the door to unnecessary problems. INHERITANCE Feature-INNM0518

I see an increasing number of cases where inheritances are busting up families and family relationships. The attached article does a great job highlighting a few of the unintended consequences that can affect all of us, not only the rich and famous. Read this: INHERITANCE Feature-INNM0518

Or you can click on the link at Insurance News Net to view the article online.

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