People in California may be surprised to hear that, even in this economy, a recent survey has shown that well over half of all retirees do in fact have enough money saved up to provide an inheritance to heirs and loved ones. In fact, nearly two-thirds of this generation of retirees plan to leave money or other assets in their wills. The amount of all of this inheritance is pretty staggering as well. According to the study, future inheritance from retirees could tally up to over $6 trillion collectively.
Before younger generations go jumping for joy, however, they should realize that they may not necessarily be inheriting a substantial estate. It's these heirs in particular who should pay extra close attention to how the save or spend their inheritance, otherwise they may squander it on lavish purchases, trips or status symbols and be left with nothing.
The study showed that a large majority of people who expect to gain an inheritance during their lifetimes have prudent plans for the money. Almost three out of four survey respondents said they would use their inheritance to pay off debt or use it for their education.
Educational goals are a very common reason why people set up trusts. Trusts that are set up to provide for the beneficiary's educational expenses are an excellent way to avoid unnecessary taxation while ensuring that the beneficiary uses the money for a noble and practical purpose. People whose estate planning goals include providing for future generations may want to consider speaking to an experienced estates and trusts attorney about the possibility of setting up a trust for their heirs' educational goals. With the cost of education continuing to skyrocket, beneficiaries of education trusts will undoubtedly find their inheritance windfall to be useful and practical.
Source: Daily Finance "3 Smart Ways to Spend Your Inheritance," Rich Smith, Oct. 2, 2013