We all want to make sure that our family and loved ones are taken care of after we’re gone. Leaving an inheritance is one way to do this, but it’s important to understand the financial planning involved in creating and managing an inheritance so that your wishes are carried out as you intended. Here are some tips for leaving an inheritance that will ensure your legacy lives on.
Create a Will or Trust
The first step in any estate planning process is to create a will or trust. If you’re unsure of which option is best for you, consult with a financial advisor who specializes in estate and financial planning. Once you have drafted your will or trust document, make sure it is reviewed by a qualified attorney before signing it and ensuring it is properly executed. Doing so will help ensure that the provisions of your will or trust are binding and that your wishes are honoured after you’re gone.
Choose Beneficiaries Carefully
When selecting beneficiaries for your estate plan, be sure to choose someone reliable and responsible enough to handle the money you wish to leave them. Consider not just their current attitude towards money management but also their future goals and plans; if they’re currently young and irresponsible but plan to become more financially savvy later on in life, then consider leaving them something smaller now with larger amounts left for them at a later date when they can better manage their finances.
Plan Ahead for Tax Consequences
One of the biggest considerations when leaving an inheritance is taxes; depending on the size of the estate, there may be significant taxes due upon its transfer from one person to another which can significantly reduce its value unless proper tax planning has been done ahead of time. Consulting with a tax professional ahead of time can help ensure that the necessary steps have been taken so as not to tax away too much of what you intend to leave behind as part of your legacy.
Leaving an inheritance to those we love is one way we can ensure our legacy lives beyond us. However, many financial considerations need to be taken into account when creating such a plan; having proper legal documents in place, choosing beneficiaries carefully, and planning ahead for potential tax consequences are all key steps in making sure that your wishes are honoured after you’re gone. With some careful planning and guidance from experienced professionals, you can rest assured knowing that you have provided for those who matter most in life even after you’ve passed away.
AM Planning is a Registered Financial Advisor on the Sunshine Coast, providing comprehensive financial planning services to clients across Queensland. Our team are happy to discuss your financial goals and develop a personalised plan to help you achieve them. Contact us at (07) 3245 2693 today to book an appointment!