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Discussing inheritances could prevent future problems

As uncomfortable as it may seem for family members to discuss inheritance matters with their intended beneficiaries, not talking about it could lead to serious problems down the line. Parents in Nevada might have good reasons besides emotional concerns for not having the talk, such as a fear that their children will count on their inheritance too much. But having loved ones to hear about the wishes of the decedent for the first time during probate could make an already difficult time more challenging.

A recent survey shows that only about half of the respondents have talked with their kids about their inheritance. Putting it off might lead to fighting and hurt feelings. A sibling or other beneficiary might feel slighted if their share was not as big as someone else's. Talking openly about inheritances allows for these type of assumptions to be cleared up and for questions to be asked.

A discussion could also lead to an important exchange of information, such as alerting a beneficiary to assets he or she will inherit that would be subject to taxation. Inherited assets are usually not considered income but earnings on these assets could be. Money earned by selling property might be taxed too. Before letting people know they have a windfall in their future, instilling a respect for smart money management into children at a young age might help to prevent problems like beneficiaries quickly running through their inheritance.

Preparing family members for what to expect regarding their inheritance is one thing, but an even kinder thing people can do is take the time to establish a complete estate plan. Smart estate planning might better protect assets intended for heirs. An attorney could recommend an estate plan that might include a will, one or more trusts and powers of attorney for financial and health care decisions in the event of incapacity.

Source: NASDAQ.com, "Expensive Consequences of Not Having the Dreaded Inheritance Conversation", August 23, 2014

Source: NASDAQ.com, "Expensive Consequences of Not Having the Dreaded Inheritance Conversation", August 23, 2014

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