There are some parents in Texas who work their entire lives with the plan of leaving whatever assets remain at the time of their death to their children. There are others, however, who worry about how leaving their children with a large inheritance will ultimately impact them. While most people in the United States inherit $50,000 or less, there are a significant number of people left determining how up to $25 million or more will be distributed.
Most parents in Texas work hard to ensure that none of their children feel as if their siblings are favored in some sort of way. While ensuring that each child has the same opportunities in their life is understandable, there are often extenuating circumstances that could lead a parent to leave one child a larger inheritance than others. Parents who may be considering doing so may be unsure of the best way to do so.
The news in Texas and around the nation was full of stories regarding how Aretha Franklin died without a will in August of 2018. Many questions involving inheritance issues arose since there was no estate plan in place, specifying who should receive her assets. Recently, three handwritten wills were found at Franklin's home, creating even more confusion about the Queen of Soul's legacy.
When most Texas residents and others around the country learn that they have been included in someone's will, they begin dreaming of what they will receive one day. It may be something of monetary value, such as property, cash or a business interest. On the other hand, items of sentimental value can be just as meaningful. However, what happens if a person is not happy about receiving an inheritance?
Those Texas residents who still have their parents or grandparents in their lives likely count themselves as fortunate. For many, having the older generations of family members still with them is priceless. Of course, it is natural to assume that individuals will receive an inheritance after the passing of their parents and grandparents. In fact, a recent study by a national investor management group revealed that a large number of young people expect these inheritances. However, expectation and reality do not always coincide.
Many Texas parents, and even grandparents, often want to make sure that their young loved ones are provided for in the event of their passing. It is common for individuals to use estate planning tools, like trusts, to protect and allocate assets. However, some people may wonder whether those beneficiaries should know that the trusts exist.
Estate planning is a process that enables Texas residents and others around the nation to specify exactly how they would like to distribute their assets after they have passed away. A person's estate plan may consist of only a will or be more complex with different types of trusts involved. Regardless of its complexities, a basic step in any plan is naming beneficiaries. Experts stress the importance of making thorough and ongoing reviews to ensure that one's beneficiary designations are up to date in all documents included in an estate plan.
Those who receive considerable assets from generous loved ones who passed away are usually appreciative but sometimes don't know what to do with their new-found wealth. Such situations can be overwhelming to beneficiaries, and concerns quickly surface about how much will be owed to the IRS. Residents of Texas and elsewhere may have mixed emotions about an inheritance and the tax burdens associated with it.
Making long-term financial arrangements for a disabled family member may get easier. Until recently, people with disabilities could only own $2000 in assets to continue to receive state and federal assistance. The Achieving a Better Life Experience Act was created in 2015 to allow states, such as Texas, to launch tax-advantaged savings programs for disabled individuals. An ABLE Savings Account differs from a Special Needs Trust, which has a minimum contribution of $10,000. In most states, ABLE accounts can be started with just $25 and may be a better option than inheritance trusts.
An increasingly tough economy has left many people in difficult financial situations. Recent studies show one in three people in the United States are counting on an inheritance from family members to reach financial security. In Texas and elsewhere, one of the most common ways for younger generations to receive an inheritance is through unspent IRA balances.