Wills & Estate Planning: How to Leave an Inheritance to the Challenging Family Member
There could be one in every family. That one family member that causes worry and angst for their siblings, parents, and grandparents.
This challenging family member may be completely ignorant of the fact that they cause such emotional turmoil for others, especially when the worrier is wealthy and there is an inheritance on the line.
For the affluent older generation, they love this person and want to do what’s right. They just don’t know how.
Transferring wealth reasonably and equitably isn’t an easy decision. There are many factors that need to be considered, especially if the future recipient is not capable of handling the wealth or due to circumstances, should not be handling large sums of money. The loved one may have addiction issues (gambling, drugs, drinking). They may be on Ontario Disability Support Program (“ODSP”) and special rules apply to them. Perhaps the person could be heading for a divorce in the future or maybe they’re just lousy with money.
Lump sums are terrible ideas for those that will be overwhelmed with the amount and may in fact inadvertently abuse the financial gift.
Putting rules around how money will be received by the beneficiary, can be a simple, strategic decision that can reduce anxiety for the person planning their estate. In fact, the decision on how wealth will be received can be reduced to answering two questions: how much and how long.
You decide how much you want to give (percentages are ideal) and you decide how long you want that payment stream to last (2 to 25 years). From that basis alone, you can structure a regular payment stream to transfer an inheritance to someone overtime as opposed to leaving a lump sum.
You don’t need a Will to execute it, but you do need to work with a life insurance licensed Financial Advisor. Please reach out if you have questions.
At Tayler Insurance & Estate Planning, our solutions are simple and tax efficient. We help retirees grow their wealth, and plan to protect their financial legacy.
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