Should an inheritance be strictly an inheritance, to be left to children when their parents die? Of course, every family is differentβboth in terms of what they can afford and what brings them joy. But there are some things every family should consider when deciding how to pass wealth from one generation to the next.
Roessler, certified divorce financial analyst at the Center for Financial Planning in Southfield, Mich. WSJ: How do you advise clients on the topic of the timing of inheritance? GARRY: I believe strongly that parents should dole out money while they are alive and not stockpile it any more than they need to for their own financial security.
The people who make gifts during their lifetimes are able to help their children, and maybe grandchildren, at the exact time they likely most need the money, and not based on the random date of their death. They also get to see the benefit of the gift to their children and grandchildren. The extent of the gifts depends on how much the parents can afford. ROESSLER: It depends on their personal goals, tax situation and current financial needs, as well as the financial needs and tax situation of their heirs.
First, they need to make sure they have enough resources to cover their own financial needs, including any potential long-term-care expense. They wonder: Will their children be responsible with the money?
Unfortunately, a lot of their children and grandchildren are not. However, as government aid ends, many millennials will be left without jobs and with increased expenses. In conversations with older clients, they are prepared to begin making adjustments in their gifting strategy to accommodate changing needs.
