Inheritance planning will help us to maximize the value of our inheritance, and ensure it is not eaten away by the ravages of inflation, or wasted on a series of luxuries. You don’t want to have a bad financial planning out of your inheritance.
We should appreciate the unexpected addition to our wealth, which has been gifted to us by the will of a loved one. We should want to use this to improve our own financial position, in the long term, and not simply live for the moment. We may also have had specific requirements placed on us in terms of the will. This is why we need to do Inheritance planning.
Now that we understand why we need to do it, what exactly is it?
Simply put, inheritance planning is what we do to ensure we meet any specific requirements of the will – in some instances our inheritance may even be conditional upon meeting these requirements – and that we manage the additional wealth in such a way that we obtain the most benefit from it in the long term.
Unless we have an intimate knowledge of both the law and investment markets, which is highly unlikely, we will need to call for some specialist advice.
The first would be a lawyer, who can explain the details of any restrictions placed on us by the will and acts as inheritance tax planner. Wills are notoriously difficult documents to understand, so it is best to have someone used to writing them explain it to us. If you do not already have one, find a lawyer that you are comfortable discussing your personal financial circumstances with, and feel that you can trust.
The second specialist to call in would be an investment adviser. It is easy for the novice to make he wrong investment decisions at the best of times, and with the current state of the economy this is truer than ever.
Once your attorney has explained any restrictions, make sure that your investment adviser is aware of these. If there are very specific or complicated restrictions, it may be a good idea for a joint meeting with both the layer and investment adviser.
Be proactive and plan carefully.