Members of the baby boom generation, which is comprised of about 79 million individuals, are now inheriting large funds from their financially conservative parents who learned their saving tactics by living through the Great Depression. According to an article published in the New York Times there have never been as many heirs to significant amounts of money as there are now. Many people who inherit their parent’s money have a very emotional reaction and struggle with deciding the proper way to handle the influx of new money. Some see it as an opportunity for new beginnings whereas others feel more ambivalent about using the money that their parents saved for so long. The parents of the latter baby boomers were typically very cautious with their money so some heirs find it hard to invest their inheritance in a more risky manner even if it may result in greater reward because of the emotional ties that come along with the investment. There is no right or wrong way to handle an inheritance, as long as the person is making the decision consciously for his or her self. Oftentimes individuals are left with a large inheritance that they did not expect and parents should initiate a conversation regarding the future inheritance with the children as it is often an uncomfortable topic for a child to bring up without appearing greedy. The decision about how to use the funds may be more easily made if parents have a conversation with their children about how much money they are expected to inherit so that they can be prepared and plan ahead.
In addition, there are various ways in which an inheritance can be given. For example, if there are concerns about divorce, creditors, bad decision making, addiction or even a beneficiary disabilities, then utilizing a trust to hold the inheritance instead of an outright distribution may be more appropriate. We can certainly help you work through these decisions.
To read the article published on this topic in the New York Times please visit: http://www.nytimes.com/2014/02/11/your-money/when-boomers-inherit-complications-may-follow.html?src=rechp&_r=1