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Ways to help ensure inheritances are not wasted

Those deciding how to leave their estate to their heirs may be concerned how the estate will be handled once it is passed down. This is a legitimate concern, as stories of inheritances squandered circulate in the media. In fact, a study conducted by WealthCounsel found 35 percent of people are developing their estate plan in such a way as to avoid reckless financial behavior by their heirs.

While drafting a legally sound will that reflects an individual's desires is helpful, experts offer other suggestions to aid in estate protection. First, experts suggest talking about the inheritance with an heir well in advance. Some experts state children who talk with their parents about an inheritance are much more responsible with money when obtained. Second, professionals suggest giving smaller gifts throughout one's lifetime in order to provide heirs with practice handling newfound wealth.

Third, and perhaps most important, experts suggest setting up a trust with strings attached. A trust will help ensure inheritances are used according to the estate planner's wishes, and it may be drafted in a way that requires an heir to meet certain requirements in order to receive payments. These restrictions can be related to education, avoiding drugs and alcohol, or reaching a certain age.

Estate planning can be complex. Wills and trusts can be powerful tools to ensure the estate is handled in accordance with a planner's wishes, but they must be drafted carefully in order to prevent unwanted consequences. Mishandled will or trust documents may lead to will contests and inheritance issues. To avoid these problems, one who is planning his or her estate should consider seeking sound legal advice from a Minnesota estate planning attorney.

Then, together, the attorney and the planner can develop a course of action that seeks to protect the planner's legacy. This thorough, legally sound planning can put an individual's mind at ease and help them feel like their family will be taken care of after they are gone.

Source: Money Magazine, "Keep your kids from blowing their inheritance," Kerri Anne Renzulli, Nov. 21, 2013

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