Family and finances can be an uncomfortable combination to discuss. Without professional help, this conversation is even more difficult to navigate. Jack Howley is a wealth advisor in Naples, Florida, with extensive knowledge in multiple areas. Integrating stockbrokers, bankers, and investment advisers are one method Jack Howley can help minimize taxes and protect family wealth.
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What Exactly Is Family Wealth?
Wealth means more than just money in the bank. Jack Howley can think of several assets that may accumulate wealth over time. Depending on specific investments and the economy, these factors can impact the financial health of a family.
Financial capital can include stocks, cash, real estate, and business investments; since wealth cannot be defined in a dollar amount, the definition of “wealthy” changes depending on the individual. Generational wealth can greatly impact how a family invests and spends depending on age.
Jack Howley believes in sustaining wealth over three generations. Planning and financial assessment are crucial. Families that have made their money through business will usually invest this capital back into their company. Once the next generation inherits the wealth, this money has the opportunity to shape future generations.
The Complexities Of Inheritance
Family inheritance is usually planned to sustain the financial well-being of family members. Regardless of how much money or the number of assets accumulated, this wealth is usually divided between multiple people.
There are several ways an inheritance can be distributed. A trust is commonly used to control these distributions. Trusts can help secure specific assets through legal action. By creating an individual trust, children can receive money that will specifically stay with them regardless of a divorce. This can potentially benefit adult children into retirement.
Inheritance decisions can cause mixed emotions. Family members may not receive the same amount of money. Dividing up assets can cause distress if property values fall or the economy changes. Family inheritance can cause competition between siblings. These issues are not uncommon and can create tension within a family unit.
Who Should Inherit Family Wealth?
Choosing how to distribute family wealth is a decision that has the potential to affect generations. It also has the potential to impact relationships within the family if the distribution is seen as unfair.
Specific interests of a potential benefactor should be incorporated into the decision-making process. A trust may be set up in advance in the best interest of an adult with special needs. Advisors and healthcare professionals can also help parents understand any overlooked issues that may arise. Depending on the advisor, these issues can range from health conditions to wealth assessment.
Jack Howley focuses on protecting family finances by working with investment advisors and accountants to understand an inheritance’s financial scope fully. By assessing all assets and available money, distribution can be accurately examined.
Approximately 15% of siblings say they’ve experienced conflict over inheritance issues. To avoid resentment, communication is important during this time.
Several considerations arise when dividing family wealth. If there are multiple children, giving each child, an identical inheritance may not be possible. An equitable and an equal inheritance is not always the same if one child has a significant amount more or less than others.
What Happens If There Is No Will?
Inheritance can be extremely complicated without a will. Without a legal will, an estate will go through a process called intestacy. This means the state will decide how assets are given away. Assets can include money, real estate, and family heirlooms.
Depending on the state and individual circumstance, this process can vary in length. If there are children, this can become an even trickier situation. Although family inheritance can be confusing and complex, many individuals will leave a will to help sort out specific details.
What Are The Family Values?
How money is spent can reflect what a family prioritizes. This is especially true if that wealth will impact another generation. Individuals that choose to spend their money on property or cultural events may see their financial opportunities differently.
Family values include work ethic. How much an individual works, where they are employed, and who benefits from their labor are all questions that may impact an inheritance. Many parents with multiple adult children will know how their money or wealth may be spent depending on who receives what type of inheritance.
Parents are usually recommended to be flexible in this area. If one adult child does not have the same passion or goals, giving them less money may cause an emotional rift within the family. Since equal does not always mean fair, this decision should not be made in haste.
Certain extended relatives or adult children may have critical skills that can flourish with family wealth. This can also help generate family income depending on the desires of the individual. Technical skills, medical knowledge, and entrepreneurship can benefit the family in different, but essential ways.
Many people factor in their children’s lifestyle and how much responsibility they have taken for the family. If one child has been the primary caregiver for a parent, this can impact how an inheritance is created. Ultimately, the decision lies with the parent.
Family wealth does not necessarily mean an inheritance must be given to a child. Family wealth can also be passed along to friends or other non-family members. Family wealth can also be donated to certain charities or schools.
Preparation For Inheritance
Parents may worry about the financial future of their children. Even adult children may not understand how to manage certain assets or accounts. Before legally planning an inheritance, many adults will have a conversation about family wealth with their benefactors.
While inheritances are often rewarding, there are financial factors to consider. Without clear communication, a beneficiary may need to pay unnecessary taxes or settlement fees. A trained financial expert like Jack Howley can simplify the process.
If you are interested in even more lifestyle-related articles and information from us here at Bit Rebels, then we have a lot to choose from.
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