More Americans than ever are amassing fortunes but how do you pass on wealth to heirs?
There are more families with wealth that surpass $5 million today which increases the need for information on the best way to pass on that wealth to the children, according to Barron’s report “Penta Millionaires: The New Rising Class.”
What many of the new wealthy are discovering is the old truth that having money in and of itself does not necessarily translate into a worry-free life. Instead, being wealthy comes with its own set of worries about maintaining that wealth and how best to pass it on to the next generation.
Wealthy people, especially those who have earned the wealth themselves, often fear that if they leave it to their children, it could ruin their children’s lives.
The children might inherit the wealth and decide they do not need to work hard at their own careers and they can just live off of their parents’ money. Some parents also fear their children will waste their inheritances on frivolous pursuits and possessions.
There are several ways to help alleviate these concerns about the effect of large inheritances on children.
One way is to make sure the children receive a proper education in how to handle finances. Another complimentary way is through proper estate planning.
Inheritances can be structured to ensure that assets are not squandered and that the children who inherit wealth continue to pursue their own careers.
An estate planning attorney can guide you in the best way to pass on your wealth to your children.
Reference: Barron’s (Sept. 17, 2016) “Penta Millionaires: The New Rising Class”