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Guilt is the inheritance you don’t want to leave your heirs

On Behalf of | Apr 28, 2023 | Estate Planning

Much has been written about the “Great Wealth Transfer.” That refers to the roughly $84 trillion it’s anticipated will be left over the next couple of decades to younger generations.

If you’re in the Baby Boomer generation or slightly older or younger, you likely feel fortunate that you’re able to leave your loved ones a small portion of that $84 trillion. At a time when getting a good college education, buying a home and starting a family are less realistic dreams than they were when you were young, those inheritances can make life a little easier.

Those who benefit from the Great Wealth Transfer sometimes suffer what’s been dubbed “inheritor’s guilt.” Numerous things can contribute to this. If someone has seen their parents work hard their whole lives and spend little money and time on luxuries, they can be shocked to learn that they had a substantial amount of money saved up and feel guilty about spending it – even on things like their own children’s college educations.

People often feel inheritor’s guilt if one or both parents were highly successful people, but they haven’t yet been able to match their accomplishments. They may feel like they don’t deserve to benefit from the wealth those accomplishments brought them.

Communication and preparation can help

As you develop your estate plan, you can help save your loved ones from inheritors’ guilt by talking with them about what they’ll inherit. Just having some idea of how much they’ll receive can help them prepare. It can also help to let them know how you foresee their inheritance benefitting them (being able to start their own business, move to a larger home, send their kids to elite colleges, donate to causes they support, etc.).

This can give them a sense of purpose when they do get the money. Of course, if you fear any of them won’t be able to wisely deal with an inheritance, there are various types of trusts you can establish.

You may want to start gifting your adult children and grandchildren some of your assets while you’re still around. This can be beneficial tax-wise (if you do it correctly) and give you a chance to help them work with a financial professional to manage and grow their money.

Every person’s estate planning goals are unique. By having sound legal guidance, you can make the best decisions for yourself and your family.