How You Can Leave Money to Your Heirs - Regardless of Your Income Level

Financial expert Jeffrey Condon shares secrets on how to leave a financial legacy to your family.
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Article Summary: 
Financial expert Jeffrey Condon shares secrets on how to leave a financial legacy to your family.
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Jeff is an estate lawyer and assists clients in transferring their lifetime of accumulations to their children in the form of an inheritance plan.  An inheritance plan can be a will or living trust, but either way, Jeff says the purpose is to instruct an estate attorney regarding who inherits money/property and on what conditions.  Unfortunately, inheritance plans often go sour and leave bitter family legacies in their wake.  When Jeff first started practicing estate law, he was innocent in his approach to human nature.  When his clients told him there would never be any inheritance conflicts between their children, Jeff believed them.  Nothing prepared him for the harsh reality of human conflict when his clients’ “perfect” children divided their inheritance.  “Inheritance planning is recognizing the numerous other inheritance problems that may rear their ugly heads,” he says.

As part of an effort to prevent problems and maintain family unity when parents die, Jeff discusses the problems associated with estate planning.  Jeff and his attorney father, Gerald (now deceased) co-authored Beyond the Grave whichwas published in 1995 and revised most recently in 2014.  Since then, the book has been a rock-solid source of information for estate planning. Jeff says it’s the first book to incorporate human nature into the inheritance equation.  “Family issues, problems and conflicts often arise when parents die,” says Jeff.  “This is a book that keeps families together.”

Jeff points out several challenges from the grave which will help program your inheritance plan to:

  1. Prevent conflicts among your children;
  2. Protect the inherited money from your children’s potential problems (like divorces, failed businesses, children who may succumb to serious illness);
  3. Ensure your instructions will be carried out (name your after-death agent);
  4. Protect assets for your surviving spouse;
  5. Prevent the IRS from getting two bites of the apple.

OTHER DECISIONS

Parents often appoint one child to act as an after-death agent.  Jeffrey says when parents appoint one child over the others, the “out-of-power” children feel rejected and usually will create conflict with the “in-power” child.  It’s best to make them all the bosses to keep family harmony.  Harmony outweighs efficiency.

Sometimes parents reward failure and punish success with regard to their children.  “Kids keep score,” says Jeff.  “If there are substantial inequalities while the parent is living, then the kid who receives the shorter end of the stick will put pressure on the one who got more to make up the difference,” says Jeff.  If you leave more to your “needier” child and less to your “successful” child, you may destroy any chance of maintaining family harmony between them after your death.

You may be leaving everything to your spouse but will your spouse leave everything to your children?  When dad dies (statistically the first spouse to die), his half of the family wealth will pass to Mom.  Mom then owns 100% of the family wealth.  Later, when Mom dies, all the wealth will be distributed to their children.  Dad or Mom may expect that the surviving parent will leave all to the children, but there is a risk of that expectation not becoming a reality, especially if Mom remarries and there are step-children involved.

Sometimes parents want to help out grandchildren so it is important to specifically allocate your wealth to them after both spouses die. Do not leave an outright inheritance; leave it in a trust.

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