Inheritance 101: Everything You Need to Know

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Today’s Question:

Whether you’re trying to build an estate plan or deciding how to invest an inheritance, there are some things you need to be aware of. Let’s look at inheritances from both sides and identify the common mistakes being made, how the SECURE Act changes planning, and Nathan’s own experience with inheritances.

Click on the timestamps below to jump to specific topics. 

Confidence Corner

Estate planning is a piece of the larger retirement plan that often gets overlooked, but it can be such a valuable gift to someone on the receiving end. That inheritance can set up an individual and a family for decades to come.

But it’s not always handled responsibly. For many people, it feels like a lottery win and often gets treated as such. If you haven’t made a plan for your money, it could be gone before you know it. We’ve seen it first-hand. Just recently we had a client that received a quarter-million dollars in their 20s and it was gone within a year.

That’s just one of the common mistakes people make with inheritances. Nathan will identify the others he’s seen on both the receiving end and the estate planning side. Would you even know the first step to take after an inheritance came your way?

We’ll talk all about the subject on this episode of The Financial Answer podcast. The goal is to share as much information as we can on the topic so you’ll be prepared for this important life event. There’s only one opportunity to leave a legacy and you want to make sure it goes as planned if that’s a priority for you.

Listen to the full episode or click on the timestamps below to learn more about Nathan’s experience as a financial advisor.

[1:26] – Fun fact for the show: 90% of Americans live within 10 miles of a Walmart.

[2:51] – Today we’re talking Inheritance 101 and how the SECURE Act impacts that.

[3:15] – What do people need to know about tax implications of inheritances?

[5:01] – What are the major changes in the near future for people inheriting money?

[6:16] – With the elimination of the Strech IRA, that really targets the children.

[7:04] – Nathan had his own inheritance that was grandfathered in.

[8:17] – Roth conversions might be great for some and not for others.

[8:48] – What are some common mistakes Nathan sees people make with their estate?

[9:51] – Leaving land and farms is a very common thing here and it can cause problems with children.  

[11:25] – You need to be having conversations with the family and make plans ahead of time.

[12:16] – What are some common mistakes for people on the receiving end of the inheritance?

[13:17] – Nathan shares a client story about someone that received a $250K inheritance at 27 and it was gone within the year.

[15:22] – If you receive an inheritance, what are the first steps you should take?

[17:51] – Email question: My son graduated from college and his grandfather gave him $10,000 for a gift but it can only be used for investing. My son has asked me what he should do with it but I don’t know what to tell him. Thoughts?



A Point Of Wisdom:


Related Content:

PODCAST: Understanding the SECURE Act

PODCAST: The Final Decade Before Retirement

PODCAST: Critical Estate Planning Mistakes You Need to Avoid


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