How To Give An Early Inheritance
When most people think about inheritance, they think of it as something that isn’t given until a family member passes away. And in many cases, that is exactly how inheritance works.
But did you know that you can give an early inheritance? You may have assets you plan on leaving to your children or other family members after you die, but you do not have to wait until then to give them their inheritance.
As a premier estate law firm in New York, Levin Law Group specializes in helping families understand the complexities of estate planning and how inheritance works. When you work with our estate lawyers, we will pair you with a team that makes sure you and your loved ones are taken care of. Having the assistance of an estate attorney can give you peace of mind knowing that things are done right.
Giving an inheritance early is not a new idea. While it is not widely practiced, it is becoming more commonplace. The question is, how do you give an early inheritance, and why would you want to do this? Here are a few things to consider when making plans for your inheritance, which may inspire you to rethink how to pass on your assets to loved ones.
Why You Might Consider Giving an Early Inheritance
Giving an early inheritance allows you to see your loved ones enjoy those assets while you are still alive. It can bring you great joy and be a source of happiness in your life!
An early inheritance also lets them use it immediately rather than at a point when it may not be as impactful. Perhaps your child is starting college and needs to pay for tuition or is preparing to buy their first home. Maybe they are going down the path of becoming an entrepreneur. Tapping into their inheritance early will allow them more financial freedom to focus on the things that matter, like their school, home, or business.
Your family and loved ones may be going through a tough time in their lives, and their early inheritance could help them return to a more stable place. The positive impact of an early inheritance might allow them to live their lives to the fullest now rather than waiting until later in life.
Reasons to Not Give an Early Inheritance
One thing to keep in mind is that early inheritances are not a “one size fits all” solution. Not everyone will be able to do this, nor should they.
One crucial aspect to consider is whether or not this will risk your own financial future. You may still have financial responsibilities, and giving an early inheritance may not be the best idea at that point.
Also, if you are someone who is still of working age, you should not think about touching your retirement savings, as those are funds you will still need to sustain yourself. You need to first invest in yourself before you can start investing in others. There is also the possibility that your family does not want to take their inheritance right now.
Depending on your financial situation, there may also be tax implications to consider. If you have a high enough net worth, there may be taxes owed when passing along an inheritance. Levin Law Group’s estate lawyers can help you understand exactly what tax repercussions there may be. Our estate law firm has helped countless families in New York work through an inheritance. Working with an estate attorney is the best way to make the process as smooth as possible.
How to Give an Early Inheritance
If you decide that giving an early inheritance is the right path for you, there are several ways to proceed.
Giving cash is perhaps the most common way, and to some, it may be the preferred method. You can tailor the inheritance to have cash allocated for a specific purpose, like paying off student loans or a down payment on a house. It can even be structured to pay for something like a life insurance policy. Non-cash assets would need to be handled differently, and one of our excellent estate lawyers can help you through that.
Regardless of whether you include cash or other assets in the early inheritance, one thing you should do is manage your expectations. If you are choosing to give an inheritance without a specific structure or purpose, you should know that your loved ones will use the inheritance as they see fit. If you are concerned about seeing them use the inheritance in a way you do not like, it may not be the right choice for you.
No matter how you choose to pass along your inheritance, Levin Law Group will assign you an estate attorney to help every step of the way. Call us at 1-800-517-5240 to see how we can help you with your inheritance concerns, and click here to see the other practice areas we specialize in.