Estate Planning Blog

Elisabeth Pickle Law, P.L.C.

Estate Planning Blog

What About an Ethical Will?

When the discussion turns to ethical wills, people often sigh and say they wish they had such a document from a parent or a grandparent. No one has ever told Debby Mycroft, who is described by Next Avenue in “The Ethical Will: Life Is About More Than Your Possessions,” that they wouldn’t want to read an ethical will from a beloved family member.

Unlike a legal will, an ethical will, which is sometimes called a legacy letter, is not written by attorneys, but by individuals. They include life lessons, family stories, values, define hopes for the future for loved ones, apologies to anyone they have hurt and gratitude to those who haven’t been thanked enough. The letters were once written by parents, to be read after their parent’s death. However, now anyone can write a legacy will, and it can be directed to anyone.

Mycroft is a writer who focuses on helping people write their legacy letters.

People without children create ethical wills to share them with the friends who have become their family. In one instance, Mycroft’s client was a woman who had been placed in child protective services, because her parents were not able to care for her. She wanted to write a letter to other foster children to share her story and let them know that they too could overcome a rough start to life.

Whoever you are, you have a story to tell. You don’t have to be a war hero or win a Nobel Prize to have a story that will be loved by your family, friends, or even strangers. Every one of us has a unique journey through life, and we all have lessons, stories and values to share.

The process of writing an ethical will can bring great peace of mind. By writing an ethical will, you’ve created a legacy that will live on, long after you are gone. For some people, writing a legacy letter to share their values fosters clarity of their values. That leads them to start living their life more intentionally.

If you aren’t sure how to start writing a legacy letter, there are websites and books about this topic, including online templates. Unlike an online will, there are no legal requirements for a legacy will. Therefore, you are free to create a document any way you want.

Do you need to work with a professional? For a regular will and an estate plan, yes, you need an experienced estate planning attorney. However, with a legacy will, you can do it on your own or work with a professional writer. But don’t worry too much about format or grammar in your legacy letter. Whether your legacy letter is elegant or rough, simple or complex, as long as it contains the truth, it will be a wonderful gift.

Tell stories to share your values; they are better than lists of what matters to you. One woman wrote a story about signing a contract for a job that she thought was clerical but turned out to be factory work. She fumed about it, but her parents explained that she had signed a contract and made a commitment. She stuck with the job, learning about integrity, persistence and diligence. After that job was completed, the employment agency sent her on great assignments, because they knew she was reliable and stuck to her word. That’s a life lesson to share.

There are some things that should be left out of a legacy letter. Criticism, judgments, regrets and family secrets need to be given serious consideration. What are you trying to accomplish with a letter that will be shared among generations? You don’t want to leave behind a legacy of destruction. If you write such a letter, read it a few times over a period of time to see, if that’s really how you want to be remembered. You can always tear it up and start over again.

Ask a trusted friend to have a look at your legacy letter. They may see omissions that hurt the ones you love, like the woman who wrote about her two children, but devoted pages to one and not the other. An objective reader will be able to help you avoid some pitfalls.

Videos and recordings are great.  However, remember that technology changes, and the phone that you record your video on may not work in five, ten, or fifty years. Include a hard copy of the letter and add hard copy family photos. Those will work, regardless of changes to technology.

Finally, consider sharing the letter with members of the family before you die. What a wonderful gift to share. This way you can expand on the stories, mend wounds, answer questions and grow closer.

When is the best time to create your legacy letter? How about now? Mycroft recalls her own mother, who was the only one who knew the stories of the family. She had given her mother a fill-in-the-blanks family history book, hoping to preserve the history. When she cleaned out her mother’s house, she found the book — and it was completely blank. If you have a living relative, sit down with them to write or record the history, before it’s too late.

Reference: Next Avenue (April 11, 2019) “The Ethical Will: Life Is About More Than Your Possessions”

 

Forgot to Update Your Beneficiary Designations? Your Ex Will be Delighted

Your will does not control who inherits all your assets when you die. This is something that many people do not know. Instead, many of your assets will pass by beneficiary designations, says Kiplinger in the article “Beneficiary Designations: 5 Critical Mistakes to Avoid.”

The beneficiary designation is the form that you fill out, when opening many different types of financial accounts. You select a primary beneficiary and, in most cases, a contingency beneficiary, who will inherit the asset when you die.

Typical accounts with beneficiary designations are retirement accounts, including 401(k)s, 403(b)s, IRAs, SEPs, life insurance, annuities and investment accounts. Many financial institutions allow beneficiaries to be named on non-retirement accounts, which are most commonly set up as Transfer on Death (TOD) or Pay on Death (POD) accounts.

It’s easy to name a beneficiary and be confident that your loved one will receive the asset, without having to wait for probate or estate administration to be completed. However, there are some problems that occur and mistakes get expensive.

Here are mistakes you don’t want to make:

Failing to name a beneficiary. It’s hard to say whether people just forget to fill out the forms or they don’t know that they have the option to name a beneficiary. However, either way, not naming a beneficiary becomes a problem for your survivors. Each company will have its own rules about what happens to the assets when you die. Life insurance proceeds are typically paid to your probate estate, if there is no named beneficiary. Your family will need to go to court and probate your estate.

When it comes to retirement benefits, your spouse will most likely receive the assets. However, if you are not married, the retirement account will be paid to your probate estate. Not only does that mean your family will need to go to court to probate your estate, but taxes will be levied on the asset. When an estate is the beneficiary of a retirement account, all the assets must be paid out of the account within five years from the date of death. This acceleration of what would otherwise be a deferred income tax, must be paid much sooner.

Neglecting special family considerations. There may be members of your family who are not well-equipped to receive or manage an inheritance. A family member with special needs who receives an inheritance, is likely to lose government benefits. Therefore, your planning needs to include a SNT — Special Needs Trust. Minors may not legally claim an inheritance, so a court-appointed person will claim and manage their money until they turn 18. This is known as a conservatorship. Conservatorships are costly to set up. They must also make an annual accounting to the court. Conservators may need to file a bond with the court, which is usually bought from an insurance company. This is another expensive cost.

If you follow this course of action, at age 18 your heir may have access to a large sum of money. That may not be a good idea, regardless of how responsible they might be. A better way to prepare for this situation is to have a trust created.  The trustee would be in charge of the money for a period of time that is determined by the personality and situation of your heirs.

Using an incorrect beneficiary name. This happens quite frequently. There may be several people in a family with the same name. However, one is Senior and another is Junior. The person might also change their name through marriage, divorce, etc. Not only can using the wrong name cause delays, but it could lead to litigation, especially if both people believe they were the intended recipient.

Failing to update beneficiaries. Just as your will must change when life changes occur, so must your beneficiaries. It’s that simple, unless you really wanted to give your ex a windfall.

Failing to review beneficiaries with your estate planning attorney. Beneficiary designations are part of your overall estate plan and financial plan. For instance, if you are leaving a large insurance policy to one family member, it may impact how the rest of your assets are distributed.

Take the time to review your beneficiary designations, just as you review your estate plan. You have the power to determine how your assets are distributed, so don’t leave that to someone else.

Reference: Kiplinger (April 5, 2019) “Beneficiary Designations: 5 Critical Mistakes to Avoid”

 

Lifetime and Charitable Giving: A Generous Spirit is a Good Thing

Many people give generously throughout the year, for birthdays, to help children or grandchildren with college costs or just because they want to help family or friends. However, according to the New Hampshire Union Leader’s article “Lifetime (noncharitable) giving has many advantages—and not just for tax purposes.”

Lifetime giving means that you are more involved with giving, than if your giving occurs after you have died. Perhaps the best part of gifting with warm hands, is that you are able to enjoy seeing the recipient (donee) benefit from your gift. It’s a good feeling to see a person have his life enriched by your generosity.

It should also be noted that sometimes, giving away something can be a way of liberating yourself. With less property, there’s less for you to manage, insure or provide upkeep.

If you die with no will, the intestacy laws of your state will determine who gets what. With a will, you have the opportunity to make your intentions known clearly. However, since you will not be alive, you won’t be able to see the actual transfer of property. A beneficiary might decide that they don’t want an asset. It is also possible that someone who always told you that he loved the painting in the foyer of your home, may decide to sell it, instead of keeping it.

Lifetime giving lets you react to changing circumstances and provides some control over how your assets are distributed.

After your death, your property and your estate may go through probate, which in some states can be a lengthy process. Lifetime giving also reduces the costs associated with probate and estate administration, because they won’t be included in your estate at the time of death. Assets that come out of the probate estate, reduces the likelihood of estate creditors or dissatisfied heirs. Lifetime gifts are private, while probate is public.

However, there are also tax advantages. If your gifting program is structured correctly by an experienced estate planning attorney, income and estate taxes can be decreased. Generally, a gift is not taxable income to the donee. However, any income earned by the gift property or capital gain subsequent to the gift, is usually taxable. The donor holds the responsibility of paying state or federal transfer taxes imposed on the gift. There are four taxes to be aware of: the state gift tax, the state generation-skipping transfer tax, federal gift and estate taxes and the federal generation-skipping transfer tax.

Many people give, because they want to support charitable causes or help friends and family enjoy a higher quality of life. The need to reduce the size of an estate to lower estate taxes is now less prominent, since the federal estate tax exemption is so high. It should be kept in mind that the new tax laws regarding federal estate taxes end in 2025. That may seem far away, but it will be here soon enough.

Another way to give, is to help with college expenses. Any gift must be made directly to a qualified institution. Similarly, if you’d like to help a friend or family member with medical expenses, a gift needs to be made directly to the healthcare provider. Not only are these types of transfers exempt from federal gift and estate taxes, but they are outside of the $15,000 annual gift exclusion gift you can make to an individual in any given calendar year.

This is a simple overview of gifting. An estate planning attorney should be consulted to create a plan for giving, that aligns with your overall estate plan and tax management plan.

Reference: New Hampshire Union Leader (April 7, 2019) “Lifetime (noncharitable) giving has many advantages—and not just for tax purposes”

 

Why Is a Revocable Trust So Valuable in Estate Planning?
Five must have estate planning docuuments

Why Is a Revocable Trust So Valuable in Estate Planning?

There’s quite a bit that a revocable trust can do to solve big estate planning and tax problems for many families.

As Forbes explains in its recent article, “Revocable Trusts: The Swiss Army Knife Of Financial Planning,” trusts are a critical component of a proper estate plan. There are three parties to a trust: the owner of some property (settler or grantor) turns it over to a trusted person or organization (trustee) under a trust arrangement to hold and manage for the benefit of someone (the beneficiary). A written trust document will spell out the terms of the arrangement.

One of the most useful trusts is a revocable trust (inter vivos) where the grantor creates a trust, funds it, manages it by herself, and has unrestricted rights to the trust assets (corpus). The grantor has the right at any point to revoke the trust, by simply tearing up the document and reclaiming the assets, or perhaps modifying the trust to accomplish other estate planning goals.

After discussing trusts with your attorney, he or she will draft the trust document and re-title property to the trust. The assets transferred to a revocable trust can be reclaimed at any time. The grantor has unrestricted rights to the property. During the life of the grantor, the trust provides protection and management, if and when it’s needed.

Let’s examine the potential lifetime and estate planning benefits that can be incorporated into the trust:

  • Lifetime Benefits. If the grantor is unable or uninterested in managing the trust, the grantor can hire an investment advisor to manage the account in one of the major discount brokerages, or he can appoint a trust company to act for him.
  • Incapacity. A trusted spouse, child, or friend can be named to care for and represent the needs of the grantor/beneficiary. She will manage the assets during incapacity, without having to declare the grantor incompetent and petitioning for a guardianship. After the grantor has recovered, she can resume the duties as trustee.
  • This can be a stressful legal proceeding that makes the grantor a ward of the state. This proceeding can be expensive, public, humiliating, restrictive and burdensome. However, a well-drafted trust (along with powers of attorney) avoids this.

The revocable trust is a great tool for estate planning because it bypasses probate, which can mean considerably less expense, stress and time.

In addition to a trust, ask your attorney about the rest of your estate plan: a will, powers of attorney, medical directives and other considerations.

Any trust should be created by a very competent trust attorney, after a discussion about what you want to accomplish.

Reference: Forbes (February 20, 2019) “Revocable Trusts: The Swiss Army Knife Of Financial Planning”

 

Estate Planning: Do My Debts Die with Me?

When you die, your debts do not. Your executor will be required to pay them using your assets. That means that any unpaid debt can reduce the wealth you’ve left behind for your heirs. In some cases, your family members could even need to pay your debt.

Reader’s Digest’s recent article, “This Is What Happens to Your Debt When You Die,” explains that not all debt is created equal. With secured debt, like a mortgage or car loans, your estate can either pay off your debts in full or continue making installment payments. Another option is to sell the property or turn it over to the lender to satisfy the debt.

However, any unsecured debt, such as credit cards, bills, or personal loans, is typically just paid from the estate. The estate is everything you own, such as assets, bank accounts, real estate and other property.

Note that student loans are the exception, but there are some caveats. Most federal student loans, along with private loans without a cosigner, are discharged with proof of death. Thus, your heirs won’t be responsible for those loans. However, if your private student loan was cosigned, that person will be required to pay it off. There are also some loans, like PLUS loans, that while technically forgiven, could leave the parent who took it out with higher taxes.

The way to protect both yourself and your family, is to speak with an experienced estate planning attorney to get your affairs in order.

Creating an action plan for your outstanding debt is a critical component of the estate planning process. You also need to ask about other end-of-life plans, like medical directives, wills and trusts to manage your assets, when you pass away.

You should also review your life insurance policy to make certain that it’s up-to-date, and don’t forget to review your named beneficiaries.

If your beneficiaries are assigned correctly, some of your assets may bypass probate and be protected from creditors. Therefore, anyone who’s listed on your policy won’t be forced to hand over their money to satisfy your debt.

Reference: Reader’s Digest “This Is What Happens to Your Debt When You Die”

 

Vacation Home: What’s the Best Way to Pass to the Next Generation?

The generous exclusion that allows wealthy individuals to gift up to $11.4 million and not get hit with federal estate taxes, came from the Tax Cut and Jobs Act of 2017. However, it’s not expected to last forever, according to the article “What to Know When Gifting the Family Vacation Home” from Barron’s Penta. Those who can, may want to take advantage of this window to be extra-magnanimous before the exemption sunsets to about $5 million (adjusted for inflation) in 2025.

At issue for potentially giving, is that when someone transfers property, the recipients must account for it, according to the original price paid for the property. This is known as the basis. For example, shares of stock valued at $5 million today that were originally purchased for $1 million 10 years ago, would be subject to income taxes only on $4 million, if the recipient were to sell the stock.

Advice given to wealthy individuals is to make use of that higher estate tax exclusion while it’s still in place, and that may include property that they expect to gift to beneficiaries. The most likely asset would be the family vacation home, whether it’s a ski chalet or a beach house.

First, make sure your children want the property. There’s no sense going through all the processes, unless they plan on enjoying the vacation home. Next, figure out the best way to gift the home, while making the most of the high exclusion.

A nice point: you won’t have to give up the use or control of the house during this process. Experts advise not making an outright gift. This can lead to less control or the loss of a share to a child’s spouse, in the event of a marital split.

Another option: transfer the property into a trust. There are several kinds that would work for this purpose. Another is to consider a Limited Liability Corporation, which also serves to protect the family’s assets against any claims, if someone were to be injured on the property. The parents would transfer the property into the LLC and give children interests in the company.

A fairly common structure for vacation home ownership is called a Qualified Personal Residence Trust (QPRT). These are used by families who want to retain the right to continue using the home, usually for the rest of their lives. The property is transferred to the designated beneficiaries at death. If it is set up properly, a QPRT avoids any income or estate taxes.

A trust also lets an individual or a couple be very specific in how the property will be used, who can use it and any rules about how they want the home maintained. Making sure that a beloved family vacation home is well-cared for and not rented out for college parties, for instance, can provide a lot of comfort for a couple who have poured their hearts into creating a lovely vacation home.

Speak with an experienced estate planning attorney to learn how you can take advantage of the current federal estate tax exemption to pass your family’s vacation home on to the next generation.

Reference: Barron’s Penta (March 31, 2019) “What to Know When Gifting the Family Vacation Home”

 

Should You Include a No-Contest Clause in Your Will?

It’s impossible to know what is in the heart and mind of the deceased, except to consult their last will and testament. However, when there is a suspicion that the last will and testament has been changed through undue influence, the care that went into the will might be undone cautions the Santa Cruz Sentinel in “No-contest clause throws kink into trust plan.”

The example given is of a woman whose mother was in the care of her niece, who was also the trustee of her mother’s trust. The mother modified the trust to give the niece her home, which is estimated to be worth about a fifth of the total estate value. The daughter notes that at the time these changes were made to the will, her mother was in hospice care and being given morphine. It does sound as if it could be influence because changes made to a will during a critical illness, especially in the presence of strong pain medication, are questionable.

Since the trust included a no-contest clause, the daughter wonders if it’s worth challenging the will for one-fifth of the estate to charge the niece with undue influence?

An undue influence claim needs to have three points:

  • A confidential relationship — that between the grandmother and the grandchild;
  • Active procurement — the granddaughter got her grandmother to amend the trust;
  • Unjust enrichment — the granddaughter’s inheritance was increased to more than she would have otherwise received.

If all three elements are met, then the burden of proof shifts to the niece to show that she was not doing anything wrong.

There may also be a lack of capacity claim, based on the medication. It may be that the grandmother was too medicated to understand what she was doing.

The no-contest clause does present a problem. If the will is challenged, the daughter is disinherited — but only if she loses. If she wins, that no-contest amendment is invalid, and the trust returns to what it was before the changes were made.

At one point, no contest clauses were so powerful that there was consideration given to not allowing them to be used in wills. In California, as of Jan. 1, 2010, a person may file a contest and if the judge determines that they had probable cause, they are not automatically disinherited.

In this case, if the facts would lead a reasonable person to conclude that there was undue influence, it’s likely that the daughter in this example would win. It would be up to the court to determine whether she should be disinherited. No-contest clauses are strictly construed by the courts, so unless the no-contest clause says that it applies to amendments, she may be okay.

There is one fact that she needs to ascertain, before moving forward. If the estate planning attorney met with the mother and prepared the amendment, then the attorney will be a neutral witness who will be able to testify to her mother’s mental capacity and her wishes.

It is not uncommon for people to change their wills to favor the person who spends their last weeks or days with them, as they prepare to die. One must wonder in this case, as to why the niece and not the daughter was with the grandmother at this time. Perhaps the two were very close, or perhaps the granddaughter was manipulating her grandmother. However, no one will ever truly know, except for the granddaughter and the deceased.

Reference: Santa Cruz Sentinel (March 3, 2019) “No-contest clause throws kink into trust plan”

 

Planning for a Special Needs Child

Estate planning is important for everyone, but it’s even more crucial for a family with a child who has special needs. It’s difficult to create an estate plan for children with special needs, because you don’t know what type of care he will need, or the type of government benefits for which she’ll be eligible, when she turns 18. People frequently become overwhelmed about special needs planning, because they don’t have a clear picture of what their children will need in the future.

A recent Forbes article, “Special Needs Kids Require Specialized Estate Planning,” says that if you have a child with special needs, it’s critical that you look at your planning options with your estate planning attorney and discuss your child’s health, capabilities and prognosis. You can then customize a plan that works for your child, with as much flexibility as possible.

Those with enough assets often would rather not to have their child get any government benefits and will set aside an amount to cover all the child’s living expenses in trust. Since the parents aren’t concerned with government benefits, the trust can be a discretionary trust that will distribute income and principal at the trustee’s discretion for the benefit of the child throughout the child’s life.

If there is a good chance the child will get government benefits, many parents create special needs trust to supplement (not replace) the government benefits that the child will receive. The trust must be drafted, so the child doesn’t become ineligible for the government benefits. These benefits provide for the child’s basic needs like a place to live, so the special needs trust will defray the cost of extras such as trips and entertainment.

If the parents can’t determine if their child will be eligible for government benefits, another option is for the parents to give their current trustees the authority to create a separate special needs trust at the time of the surviving parent’s death. Therefore, if the child is receiving benefits, the trustee can create the trust at that time, with the goal of preserving the child’s benefits.

All these trusts can be funded now. The parents can establish the trust and transfer cash or other assets to it, or the trust can be created now and left empty until a parent passes away. At that point, money can move into the trust from the parent’s estate, another trust or from a life insurance policy.

Some parents elect not to create a trust for their child and to disinherit him completely. The thinking is that the child can be supported solely by government benefits. Others go with a combination approach. They disinherit the special needs child and leave more assets to their other children, with the understanding that the other children will care for the special needs child. However, this isn’t a great idea. The siblings have no legal obligation to care for his or her sibling with special needs, just a moral one. If the child who inherited the bulk of the estate gets divorced, the assets are also susceptible to division upon divorce. Finally, the assets are liable to a creditor’s claim, if the child is sued.

Estate planning for a child with special needs can be hard, so get a flexible plan in place that will provide peace of mind.

Reference: Forbes (March 27, 2019) “Special Needs Kids Require Specialized Estate Planning” 

Why Do I Need a Prenup for my Second Marriage After 50?

Many older people who remarry have significant assets—like pensions, retirement funds, homes, and maybe businesses and children from their prior marriage. The financial consequences could be significant, if their second marriage doesn’t last. Forbes’ recent article, “All About Prenups For Second Marriages,” says that a prenuptial agreement can address these issues:

  • Supporting the new spouse through retirement;
  • Paying expenses and accumulation of marital property, if the spouses have retired;
  • Leaving assets to children, if the new marriage is ongoing at the time of death;
  • Balancing the needs of the new spouse with helping their own children;
  • Making accurate financial results, if the marriage fails; and
  • Ensuring a peaceful divorce process, if the marriage fails.

In a prenup, the couple can decide how they will support themselves during the marriage and can create a plan for withdrawing retirement assets, depending on their relative wealth.

An issue with prenups for second marriages, comes from the distinction between “separate property” and “marital property.” Separate property is typically the property brought into the marriage and all past and future inherited property. Marital property are those assets that are built up through the efforts of the spouses, usually by lifetime earnings in the workplace.

However, what if the couple is retired, there is no opportunity to accumulate marital property and one of the spouses doesn’t have adequate separate property to provide for his or her retirement? That spouse may then feel vulnerable, if they divorce. This can foster bad feelings that fester during the marriage. A prenuptial agreement can alter this dynamic and provide a fair and easier result, if the marriage fails or if a wealthier spouse predeceases a less-moneyed spouse.

In a second marriage after 50, many people like to leave money to their children when they die and provide for their new spouse. A prenup can detail that an estate plan be created after the couple marries, to get the result they desire. The assets of the deceased spouse can eventually be distributed to the surviving spouse and the deceased spouse’s children. Some assets can be placed in a trust to benefit the surviving spouse during his or her lifetime. The rest can go to the children of the first spouse, after the death of the surviving spouse. In a second-marriage prenup, a couple can also decide that way in which they might assist their children financially during the couple’s lifetime.

A nice benefit of a prenup for a second marriage, is that it can specify the legal process to use if the couple divorces. For example, a prenup can require alternative dispute resolution, if there’s a divorce or if there is a disagreement between the heirs of a spouse and the surviving spouse.

However, sometimes, a prenup can even cause issues, typically in the process of negotiating one. Some couples even break off their engagements as a consequence. Talk to an attorney about creating an equitable prenup.

Reference: Forbes (February 13, 2019) “All About Prenups For Second Marriages

 

How to Be Smart about an Inheritance

While there’s no one way that is right for everyone, there are some basic considerations about receiving a large inheritance that apply to almost anyone. According to the article “What should you do with an inheritance?” from The Rogersville Review, the size of the inheritance could make it possible for you to move up your retirement date. Just be mindful that it is very easy to spend large amounts of money very quickly, especially if this is a new experience.

Here are some ways to consider using an inheritance:

Get rid of your debt load. Car loans, credit cards and most school loans are at higher rates than you can get from any investments. Therefore, it makes sense to use at least some of your inheritance to get rid of this expensive debt. Some people believe that it’s best to not have a mortgage, since now there are limits to deductions. You may not want to pay off a mortgage, since you’ll have less flexibility if you need cash.

Contribute more to retirement accounts. If the inheritance gives you a little breathing room in your regular budget, it’s a good idea to increase your contributions to an employer-sponsored 401(k) or another plan, as well as to your personal IRA. Remember that this money grows tax-free and it is possible you’ll need it.

Start college funding. If your financial plan includes helping children or even grandchildren attend college, you could use an inheritance to open a 529 account. This gives you tax benefits and considerable flexibility in distributing the money. Every state has a 529 account program and it’s easy to open an account.

Create or reinforce an emergency fund. A recent survey found that most Americans don’t have emergency funds. Therefore, a bill for more than $400 would be difficult for them to pay. Use your inheritance to create an emergency fund, which should have six to 12 months’ worth of living expenses. Put the money into a liquid, low-risk account, so that you can access it easily if necessary. This way you don’t tap into long-term funds.

Review your estate plan. Anytime you have a large life event, like the death of a parent or an inheritance, it’s time to review your estate plan. Depending upon the size of the estate, there may be some tax liabilities you’ll need to deal with. You may also want to set some of the assets aside in trust for children or grandchildren. Your estate planning attorney will be able to provide you with experienced counsel on the use of the inheritance for you and future generations.

Reference: The Rogersville Review (March 21, 2019) “What should you do with an inheritance?”