Protecting Your LegacyFinances
Many parents hope to leave a parting gift for their children after they’ve gone. But how can you be sure they will use their inheritance the way you intended? Haitham Aboul-Hosn, the associate managing director for Futurity First Insurance Group in Orlando, Fla., hears this concern from plenty of his clients—and they are not alone. Protecting children from mismanaging their inheritance is one of the top three pressing concerns of people seeking estate planning, according to a recent survey.
These simple strategies from Aboul-Hosn can help address your concerns and ensure that the funds you leave behind will be used wisely.
Q: What are the primary reasons someone would want to delay or restructure an inheritance?
A: Some people are concerned that their heirs will not make good financial decisions if the inheritance is collected all at once. Others want the gratification of knowing they are contributing to a certain event in their children’s or grandchildren’s lives (for example, putting money toward a college education or milestone birthday). And in many cases, it is because they have a child or grandchild with special needs.
Q: What solutions do you typically recommend?
A: There is never a set solution. Each client situation is different. But I would discuss establishing trusts and looping in an estate-planning attorney to make sure the assets are dispersed the way the grantor intends them to be.
Q: Suppose I want to specify exactly how my inheritance should be used or distributed, or protect it from ending up in the wrong hands. How would I do that?
A: There are a few ways. Some cases require an attorney or financial advisor. Depending on the value and complexity of the estate, a lot of times a trust will be needed. Sometimes solutions can come from the financial product alone, like an annuity. This is possible because the financial product is beneficiary friendly, meaning the client can assign how and to whom the assets will pass upon their death. The options are so detailed that even if the grantor outlives any of the beneficiaries the grantor themselves can choose how the deceased beneficiary’s share will be decided—whether it stays in the passed beneficiary’s bloodline, or gets shared among the still-living original beneficiaries.
The opinions expressed in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult with your attorney, accountant, and financial advisor or tax advisor prior to investing.