By: Susan M. Graham, Certified Elder Law Attorney, Senior Edge Legal, Boise, Idaho
Most people who receive an inheritance blow it. Why?
Many people are inexperienced at handling large amounts of money. They lack the discipline and willingness to seek professional help. Instead they consider their future as a permanent vacation with no need to pay attention to their investments.
One amazing example of losing everything is Barbara Woolworth (five-and-dime store Woolworth) Hutton. She inherited about one-half a billion dollars (in today’s money) and when she died she had a new worth of $3,500. The Vanderbilt family inherited about $100 billion, and one hundred years after the death of Commodore Cornelius Vanderbilt, there were no millionaires among his descendants.[1]
What steps can you take to assure a large inheritance lasts for future generations?
• Talk with your children before they inherit money. Bring them in on family meetings with trusted professionals, so the children begin to develop an understanding about the management of money.
• Model responsible spending, saving, charitable giving and investing behavior.
• Create a detailed plan providing guidance and standards as part of your estate planning documents. For example, you may want to limit a child’s full access to the inherited funds until they reach a more mature age, such as 40 or 50.
Silence and secrecy about a potential inheritance leaves your children exposed to a much higher potential of losing it all. The solution: talk to your estate planning professional to guide and protect your family and your wealth.
