Preparing Heirs for Their Inheritance

Inheriting money can be a dream come try by unlocking new opportunities and removing some of life’s stumbling blocks, but it can also be a burden for the unprepared.

Knowing what to do with the money they receive can be stressful for your heirs, since they may be confronted with unique challenges they’ve never considered.

To learn how to maneuver around the potential pitfalls for those that receive an inheritance, we can look to those with large fortunes (worth $500 million or more) and how they handle the problems.

Their strategies can potentially help you form your action plan regardless of whether you’re the one giving or receiving inheritance.

Here is some food for thought when preparing your heirs for their inheritance.

Take Stock of Their Feelings

Inheriting money can be confusing.

More wealth often goes hand-in-hand with more status and power, which can lead to heirs abusing their positions.

Others can feel trapped or isolated. They find that money has set them apart, and they have difficulties building trust and interacting with other people.

Some may think they don’t deserve the money and end up feeling guilty. They ask themselves “Why me?” and feel the family money is an anchor holding them down.

Try to understand how your inheritor feels about the money you are planning to give them and talk with them to ensure everyone is on the same page.

Transferring Wealth

Most wealthy individuals want to pass the results of their hard work and commitment to their children and other loved ones. Doing so involves several considerations:

  • Financial Matters. The aim here is to be tax-efficient in transferring wealth. For example, different tax strategies can be employed to mitigate the intergenerational loss of family wealth.
  • Ensuring Heirs Use Their Inheritance Wisely. A major concern for the wealthy is that their heirs will misuse the wealth they’re given.

Heirs are also often worried about mismanaging their inheritance, so it is important they are well prepared for what managing a large sum of money entails.

The Modern Impact of Money

A good way to foster financial intelligence in an heir is to see how wealth might affect their lives today. When they get into their teens, the majority of very wealthy inheritors have some idea that they are wealthy. Trying to hide this from them nowadays is unrealistic.

It makes sense instead to get them accustomed to the concerns that come with having money.

Try to get your heirs to consider their answers to questions such as:

  • Is wealth a source of terrific possibilities, a source of horrific problems, or some combination of the two?
  • How is money affecting your life?
  • Is wealth the cause of serious relationship problems? If so, what and with whom are they?
  • To what extent do you define yourself by your family money? What would happen if the money vanished?

Assess the ability of your heir to manage their inheritance. If they’re not up to the job, what steps can you take to ensure they become capable and won’t waste what you give to them?

Inheritor Education

There are many different ideas about how best to teach heirs to manage money. However, many inheritors are not interested in learning the ins and outs of their inheritance.

Different heirs require different approaches to wealth education to best handle their inheritance. Don’t hand over control of your assets without taking these differences into account.

An approach we find to be much more effective with inheritors is to focus on how to be responsible for their wealth, giving them a solid understanding of the bigger picture without the fine-grained details that require a passion for finance.

By knowing what they want to achieve financially and being attuned to what is going on with their money, they can make more informed decisions.

Here are some examples of skills your heirs may need to learn prior to receiving their inheritance:

  • Effectively selecting and working with professionals such as lawyers, accountants, and wealth managers.
    • Your heirs should be aware of any indicators or red flags when it comes to the professionals they work with.
  • Identifying money predators and grifters before they do harm.
  • Understanding how the trusts have been set up and what they’re designed to accomplish.
  • Using their money to better the lives of others.
    • Stewardship is part of inheritance, and this may involve a deep discussion of values.
  • Acknowledging issues with money and self-esteem, since new wealth can produce feelings of anxiety and even worthlessness among some inheritors.


You don’t have to have a fortune to benefit from getting your heirs ready to receive an inheritance from you someday.

Get going well before the day comes when assets are transferred. Encourage heirs to think about their views, values, and attitudes toward money and wealth, and how those views might change if their bottom line suddenly had additional zeros.

Most of all, help them understand some financial basics and smart ways to size up any professionals they may encounter.

As experienced financial professionals, we help clients like you figure out the best retirement plan for their situation, so that when they’re ready they can retire gracefully with peace of mind.

Please connect with us and let us help you plan for your dream retirement. We would be delighted to go on the journey with you.

Confidence Wealth Management team





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