People in California may have seen a recent editorial about people who have had the good fortune to pass on their wealth to future generations, and the surprising backlash many people in the American public seem to have against their heirs. While many people are quick to criticize people who they feel haven’t “earned” their wealth, it is obvious that common misconceptions have a lot to do with the reasons the public perception is so negative. After all, the American dream hinges on the ability to create success, and then share that success with loved ones and future generations.
People may unfairly judge children and heirs of wealthy people for simply being fortunate enough to receive an inheritance, but these judgments are often fueled by less-than-factual information. Critics of inheritance also overlook the fact that California and federal inheritance taxes take a sizeable portion of transferred wealth from heirs, and this portion has been increasing steadily over the past decade.
Ultimately, though, a person’s wealth is theirs to distribute as they see fit, so naysayers’ comments are mainly irrelevant. What is relevant, though, is the need to design an estate plan that fully utilizes the complex financial instruments that are available to people looking to pass their wealth on to future heirs. There are a number of different trusts that can help in this respect, and people should discuss the use of these various trusts in their estate plan with an experienced estates and trusts attorney.
A trust can provide important guidelines for the distribution and use of money by and among children and other heirs, and can also minimize tax liability for all parties. The American dream is still alive and well, even though it may have become subject to a more complex set of rules. An estates and trusts attorney can help people harness these rules and make the most of their money for future generations.
Source: The Daily Progress “‘Deserving’ an inheritance isn’t most important issue,” David John Marotta and Megan Russell, Sept. 8, 2013