People in Nevada who inherit large sums of money may end up squandering their newfound wealth. A Williams Group study determined that 70 percent of wealthy families do not maintain their wealth into the second generation. The same study showed that 90 percent of those families are no longer wealthy by the third generation.
One of the reasons people tend to mismanage inherited money is that they are unprepared to handle a sudden windfall. If a person suddenly has a lot of money, they may be tempted to make irresponsible purchases, and they may not know how to preserve their wealth with investments. After inheriting a large amount of funds, a person may want to hire a financial planner to help them understand how to manage their money.
Some people squander their inheritance because they do not understand all of the costs that are associated with the assets that they have inherited. While a deceased person’s estate is being settled, there are usually legal costs, administrative fees and taxes. If a person inherits real estate, there can be costs associated with transferring titles. It’s important that a person talks to a financial advisor about all of the expenses that they have before making any large purchases with their inheritance.
Some of the typical problems that beneficiaries have after inheriting assets can be solved with good will planning. A person who is writing their last will and testament may want to work with an estate planning attorney to ensure that the will communicates their wishes clearly. If the beneficiaries listed in a will do not have experience managing a lot of money, an attorney may help the will writer create trusts.