When famed comedian Jerry Lewis passed away in August of 2017 at the age of 91, many were surprised to learn that the celebrity excluded several of his children from his will. According to the comedian’s will, his only beneficiaries named were his second wife and widow SanDee Pitnick or, if something happened to her, his adopted daughter Danielle Lewis. Though Jerry Lewis’s actions were unusual, it is normal for adults to have preferences regarding what their children or grandchildren inherit. Knowing the best ways to go about leaving money your children and grandchildren will increase their chances of inheriting in the manner that you planned.
Pay Institutions Directly
If your primary goal is to fund the college education of a child or grandchild, giving the funds to the institution may be your best option. Paying their tuition directly to the school has valuable tax benefits that can benefit you and your intended heir. Alternatively, establishing an account that is exempt from gift taxes with more generous funding options specifically for paying future tuition or educational related expenses is an option. Even though your beneficiary may prefer to receive funds directly, these alternatives help them inherit more money by reducing taxes and contribution limits.
Giving a large amount of money to a child or grandchild, especially if they are a minor, can carry many different consequences. They may not be emotionally or financially ready for the burden of managing a large inheritance that is received in one lump sum. Different studies have shown that an inability to manage money makes it difficult for acquired wealth to survive more than two generations. Distributing money in smaller portions through various means during and after your lifetime helps increase the chances of the money being preserved over a longer period of time. Smaller portions being distributed can also reduce taxes associated with your beneficiary’s inheritance.
Equality is Not Always Best
Treating children or grandchildren equally is something that adults often struggle with. Having a favorite child can cause problems within a family and favoritism, real or imaged, can haunt your family after you have passed away. The urge to distribute funds equally to avoid the appearance of favoritism is normal, but in some cases that instinct can do more harm than good. A family member who has fewer financial resources, an absentee parent, or other apparent disadvantages may benefit more from a larger inheritance than a sibling or cousin. While Jerry Lewis’s inheritance distribution is an extreme example of not dividing a legacy equally among children, it serves as a reminder that leaving certain heirs nothing or a smaller amount is an option that you may need to consider.
Each legacy is different, and getting the advice of probate lawyer when deciding how to go about leaving money to your heirs is the best way to ensure that you make the right choices. The attorneys at MMZ Law know how difficult decisions regarding asset distributions to children or grandchildren are. We work with you to determine which options are right for your unique circumstances. Contact us today to schedule an initial consultation in our conveniently located Claremont, California office so that we can begin providing you with the legal advice that you deserve.
BROUGHT TO YOU BY:
MMZ LAW, A PROFESSIONAL CORPORATION
341 W. 1st St. Suite 100
Claremont, CA 91711
MARIVEL M. ZIALCITA is the founder of MMZ LAW, A Professional Corporation, where she practices in the areas of Elder Law – Medi-Cal Planning Asset Protection, Trust & Estate, Special Needs, Conservatorship, Trust Administration, & Probate. Ms. Zialcita is a frequent speaker on trust and estate matters and holds memberships in the State Bar of California, Trust and Estate Section, The San Bernardino County Bar Association, Wealth Counsel and Elder Counsel. She currently assists in the pro bono legal services program at the James L. Brulte Senior Center in Rancho Cucamonga, California. She is based in Claremont but assists clients throughout Southern California.
This information is educational information only and not legal advice.