Receiving an inheritance can be a significant event in your life, often bringing both financial growth and the need for thoughtful planning. Updating your estate plan after receiving an inheritance is crucial to ensure that your new assets are properly managed and distributed according to your wishes. Here are some key steps to consider:
Review and Update Your Will: With new assets in your possession, it’s crucial to review your will to reflect any changes in how you want your estate to be handled. You may want to include new beneficiaries or adjust the share of existing ones based on your new financial situation.
Consider Trusts: Depending on the size and complexity of the inheritance, you might consider setting up trusts to manage your assets. Trusts can be useful for minimizing estate taxes, protecting assets from creditors, and managing assets for beneficiaries who might not be ready to handle a large inheritance on their own.
Update Beneficiary Designations: Assets such as retirement accounts and life insurance policies bypass your will and go directly to the named beneficiaries. It’s important to review and possibly update these designations to coordinate with your new estate planning goals.
Tax Planning: An inheritance can significantly change your tax situation. Consult with a tax professional to understand any implications, such as inheritance taxes or increased estate taxes, and plan accordingly.
Durable Power of Attorney and Healthcare Directives: These documents should be reviewed and updated if necessary. The individuals you have designated to handle your financial and healthcare decisions should still align with your current wishes.
Consult with Professionals: It’s advisable to work with an estate planning attorney and possibly a financial advisor to help navigate the complexities of incorporating your inheritance into your estate plan. They can provide personalized advice based on your specific circumstances.
Reassess Your Financial Goals: With an increased estate, your financial goals might shift. This could affect how you plan to distribute your assets or contribute to philanthropic causes.
If you’ve recently inherited assets and need to reassess your estate plan, TrustCounsel is here to assist. Our experienced attorneys specialize in seamlessly integrating your new assets into your overall financial strategy. To arrange a consultation, please visit our contact page to select the office location most convenient for you, or complete our contact form and we will promptly reach out to schedule your appointment.