how to handle your inheritance
02 / 15 / 13

"I Inherited a _______"

To inherit means to "receive an irrevocable gift" with an emphasis on the special relationship between the benefactor and the recipients. The word inherited has its roots in the French word heir. Doesn't the word heir sound regal? Makes you think of "heir apparent", "heir to the throne", "heir to the kingdom", "a rightful heir". All this conjures up dreams of gold crowns, velvet red robes, and people feeding you grapes for the rest of your life. Whether grand and regal or touching and simple someone bequeathing you their belongings is a true act of kindness. Ernest Hemingway in the For Whom the Bell Tolls put it so gracefully:

"I had an inheritance from my father,
It was the moon and the sun.
And though I roam all over the world,
The spending of it's never done."

While no client of our firm has ever inherited the moon or the sun, they have inherited lots of different items. From the simple to the complex they all have their unique characteristics and sometimes challenges. Often the inheritance is expected but just as often it is unexpected.

More than $41 trillion will be transferred to heirs over the next 50 years, the largest transfer of wealth in U.S. history, according to the Center on Wealth and Philanthropy at Boston College. The affluent will receive the bulk of this wealth. However, for those accustomed to living paycheck to paycheck, even a modest windfall can present daunting challenges — and significant risks.

Our approach when counseling clients who receive a gift includes the following elements of awareness.

  • Take your time. No matter what you inherit. It takes time to research what you have. And it takes time to uncover the responsibilities attached to the item you inherit.
  • Be discreet. It is not that unusual for parents to leave different amounts to their children. Revealing what you received could cause long term resentments.
  • Pay attention to taxes. When it comes to missteps resulting in taxes, there can be very unintended consequences. Spending money you receive in February and not finding out until the next April that taxes were due, can produce regret and pain.

Even the simplest inheritance can involve big decisions. No matter the size of the gift, essentially someone entrusted something to your care. Whether it is something you decide to keep or you decide to convert it into something useful to you, careful thought out planning should be done.

CAV_OK has a great vantage point when it comes to answering questions regarding inheritances. With a truly cross disciple focus we can help clients consider all the alternatives and opportunities in a gift.