Money – The Law Firm of Myrna Serrano Setty, P.A. https://www.serranosetty.com Estate Planning, Medical Directives, Guardianship, Special Needs Planning Fri, 21 Feb 2020 16:49:47 +0000 en hourly 1 https://wordpress.org/?v=5.4 How Will The Coming Wealth Transfer Affect Your Family? https://www.serranosetty.com/tampa/estate-planning-attorney/beneficiaries/how-will-the-coming-wealth-transfer-affect-your-family/?utm_source=rss&utm_medium=rss&utm_campaign=how-will-the-coming-wealth-transfer-affect-your-family Mon, 19 Aug 2019 14:03:40 +0000 http://www.tampaestateplan.com/?p=1559 Whether it’s called “The Great Wealth Transfer,” “The Silver Tsunami,” or some other catchy-sounding name, it’s a fact that a tremendous amount of wealth will pass from aging Baby Boomers to younger generations in the next few decades. In fact, it’s said to be the largest transfer of inter-generational wealth in history.

Because no one knows exactly how long Boomers will live or how much money they’ll spend before they pass on, it’s impossible to accurately predict just how much wealth will be transferred. But studies suggest it’s somewhere between $30 and $50 trillion. Yes, that’s “trillion” with a “T.”

A blessing or a curse?

And while most are talking about the benefits this asset transfer might have for younger generations and the economy, few are talking about its potential negative ramifications. Yet there’s plenty of evidence suggesting that many people, especially younger generations, are woefully unprepared to handle such an inheritance.

An Ohio State University study found that one third of people who received an inheritance had a negative savings within two years of getting the money. Another study by The Williams Group found that inter-generational wealth transfers often become a source of tension and dispute among family members, and 70% of such transfers fail by the time they reach the second generation.

Whether you will be inheriting or passing on this wealth, it’s crucial to have a plan in place to reduce the potentially calamitous effects such transfers can lead to. Without proper estate planning, the money and other assets that get passed on can easily become more of a curse than a blessing.

Get proactive

There are several proactive measures you can take to help stave off the risks posed by the big wealth transfer. Beyond having a comprehensive estate plan, openly discussing your values and legacy with your loved ones can be a key way to ensure your planning strategies work exactly as you intended. Here’s what we suggest:

Create a plan

If you haven’t created your estate plan yet—and far too many people haven’t—it’s essential that you put a plan in place as soon as possible. It doesn’t matter how young you are or if you have a family yet, all adults over 18 should have some basic planning vehicles in place.

From there, be sure to regularly update your plan on an annual basis and immediately after major life events like marriage, births, deaths, inheritances, and divorce. We maintain a relationship with our clients long after your initial planning documents are signed, and our built-in systems and processes will ensure your plan is regularly reviewed and updated throughout your lifetime.

Discuss wealth with your family early and often

Don’t put off talking about wealth with your family until you’re in retirement or nearing death. Clearly communicate with your children and grandchildren what wealth means to you and how you’d like them to use the assets they inherit when you pass away.

When discussing wealth with your family members, focus on the values you want to instill, rather than what and how much they can expect to inherit. Let them know what values are most important to you, and try to mirror those values in your family life as much as possible. Whether it’s saving money, charitable giving, or community service, having your kids live your values while growing up is often the best way to ensure they carry them on once you’re gone.

Communicate your wealth’s purpose

Outside of clearly communicating your values, you should also discuss the specific purpose(s) you want your wealth to serve in your loved ones’ lives. You worked hard to build your family wealth, so you’ve more than earned the right to stipulate how it gets used and managed when you’re gone. Though you can create specific terms and conditions for your wealth’s future use in planning vehicles like a living trust, don’t make your loved ones wait until you’re dead to learn exactly what you want their inheritance used for.

If you want your wealth to be used to fund your children’s college education, provide the down payment on their first home, or invested for their retirement, tell them so. By discussing such things while you’re still around, you can ensure your loved ones know exactly why you made the planning decisions you did.

 Secure your wealth, your legacy, and your family’s future

Regardless of how much or how little wealth you plan to pass on—or stand to inherit—it’s vital that you take steps to make sure that wealth is protected and put to the best use possible.

Call our office today at (813) 902-3189 to schedule a  Planning Session and mention this article to find out how to get this $500 session at no charge.
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Blended Families, Avoid This $100,000 Mistake. https://www.serranosetty.com/tampa/estate-planning-attorney/blended-families-avoid-this-100000-mistake/?utm_source=rss&utm_medium=rss&utm_campaign=blended-families-avoid-this-100000-mistake Tue, 21 Nov 2017 00:00:00 +0000 http://www.tampaestateplan.com/?p=180 Picture this: At Thanksgiving, you have your eye on that last piece of pie. You can practically taste it. As you reach for it, someone else grabs it and there’s a tug of war. Do you share it? Does one of you give up and find another dessert? Does someone intervene and decide for you? Are you in a family that will laugh this off? Or is there some drama?

When the stakes are high and there’s money and property involved, the resulting conflict is enough to ruin anyone’s appetite.

Picture this: You’re in a blended family where there’s Mom, Step-Dad, and Mom’s kids from her first marriage. Mom dies without a Will. Step-Dad is distraught, but takes comfort in knowing that the house is almost paid off. There’s about $200,000 of equity. Mom always meant to put Step-Dad on the deed, but never got around to it. Unfortunately for Step-Dad, the “default setting” that is set by Florida law is for him to only inherit half of his wife’s estate. The step-kids inherit the other half.

Step-Dad has 3 options if he wants to keep living in the home.

Option 1: Take a life estate in the home and at his death, the house goes to the step-kids.
Option 2: Take a one half undivided interest in the home as a tenant in common with the step-kids. (The step-kids could force a sale if they wanted to.)
Option 3: Buy out the step-kids’ half share.

Everyone’s upset and relationships are strained. Will the step-kids sign over their interest to Step-Dad for free? Will it take $100,000 to buy out the step-kids? With a thoughtful estate plan, this blended family could have avoided this mess and saved $100,000, plus court costs and lawyers’ fees.

Call our office today at (813)902-3189 to schedule a Planning Session and mention this article to find out how to get this $500 session at no charge.
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