Planning for a Future Inheritance: A 6-Step Guide for Teens and Families
September 13, 2023
The subject of inheritance can be emotionally charged and sometimes difficult to discuss. However, being well-prepared can make the process more straightforward and less stressful. For young people and families who might be expecting a future inheritance, it’s crucial to take the time now to plan. Here is a 6-step guide on how to adequately prepare for a financial future that may include inheritance.
1. Open Lines of Communication
Importance: The first step in planning for a future inheritance is having open and honest conversations with your family members. Knowing what to expect and understanding everyone’s wishes can help to avoid misunderstandings and conflicts later on.
Action: Make a safe space where family members can openly discuss their plans, wishes, and any concerns they may have about the inheritance.
2. Understand the Different Types of Inheritances
Importance: Not all inheritances come in the form of cash. Properties, stocks, bonds, and even family heirlooms are all types of assets you might inherit.
Action: Educate yourself on these different forms of inheritance and consider how each type might affect your financial goals and responsibilities.
3. Consult Professional Advisors
Importance: Tax laws and financial planning can be complex subjects. It’s often beneficial to consult professionals to get personalized advice.
Action: Meet with financial planners, attorneys, and tax advisors who specialize in estate planning. They can guide you on how best to prepare for your future inheritance.
4. Create a Financial Plan
Importance: Knowing what you’ll do with the inherited assets can prevent rash decisions and financial missteps.
Action: Create a financial plan that outlines your goals, such as paying for college, purchasing a home, or investing for the future. Consult your financial advisor to help guide this plan.
5. Make Legal Preparations
Importance: Legal documents like wills, trusts, and powers of attorney are essential when planning for an inheritance.
Action: Consult an estate planning attorney to establish these crucial legal preparations. Make sure your family is aware of these documents and where they are stored.
6. Continuously Update and Review Your Plan
Importance: Life changes and so do financial markets. Your plan should be a living document that you update as your circumstances change.
Action: Regularly review your financial and legal plans, and update them as necessary. It’s a good idea to have a check-in with your financial advisor at least annually to ensure you’re on track.
The process of planning for a future inheritance can be a complex undertaking. It requires foresight, communication, and professional guidance. If you or your family needs assistance in this critical area of financial planning, we at Shah Total Planning are here to help. With our expertise in wealth management and legal aspects surrounding inheritances, we can help you navigate these complicated matters with confidence. Reach out to us today to get started on securing your family’s financial future.
