Receiving a sizable inheritance is often the result of a loved one taking the effort to create a comprehensive estate plan to protect their assets and allocate them to others after they die. If you have received a significant amount of money or physical assets, like real estate, the value of your inheritance might significantly increase the overall value of your possessions.
Especially if you intend to retain those assets and eventually pass them along to someone, an inheritance probably means that you need to create an estate plan if you haven’t done so already or update and expand your existing estate plan.
Larger estate values demand more careful planning
The higher the value of your assets, the more likely it is that your beneficiaries and family members will eventually disagree about what would be fair and reasonable regarding the legacy you pass on to them. Careful planning will help you prevent family conflict while also ensuring that your loved ones don’t have to deal with unnecessary stress because of the assets you leave behind.
Large estates can also tempt creditors to take legal action against the estate and may also be subject to estate taxes. Asset protection planning now can reduce the likelihood of conflict, creditor claims and taxes impacting what you can leave behind for the people that you love.
You may also need to plan for long-term care as you age
The more assets you have in your name, the harder it will be for you to connect with financial support as you grow older and need more intensive medical care.
For example, if you need to move into a nursing home, a few years’ worth of the costs for such a stay could completely consume the assets that you want to leave to others. Additionally, government insurance programs may be able to go after some of your assets when you die as a way of recouping the benefits they paid.
Long-term care planning is also important. The sooner you take action to protect your legacy, the more you will have to pass along to the next generation.
