On April 10, 2013

Colorado residents who receive an inheritance may react in a variety of ways. While most happily take the funds, enjoy a portion, buy a home, pay off debt and plan for the future, others feel burdened by the responsibilities accompanying owning such wealth. Still others decide they will give the money away when they’re young. Whether or not one considers the subset of inheritors known as “progressive inheritors” to be wise or naive, however, the fact stands that their numbers are burgeoning, perhaps in response to the nation’s rampant income disparity.

When it comes to estate planning, individuals should be aware of the tax implications of their choices. One young man who received a trust fund at age 18 watched it peak at $900,000. He came from a family of financiers; however, his mother instilled the value of sharing assets into him.

At age 24, he decided to give the money to two men he had grown up with, whom he considered brothers. He no longer wanted all of the money and felt they should have some of it. When he told his mother about his decision, she supported him. He elaborated that he felt uncomfortable being in a position of financial power and thought the best approach was sharing the wealth.

One group that helps these trust-fund progressives is a company called Resource Generation, who represents inheritors whose wealth varies from a home worth $500,000 to a foundation valued at $100 million, and their ages range from 18 to 35. One of the organizers explained that some of their members give away all of their inheritance while others opt to give away a large percentage.

When it comes time to receive or manage an inheritance, some young people have developed a different perspective. A probate attorney might be able to help clients avoid some of the tax implications that accompany inheritance division in order to make their contributions, whether to the next generation of their family or to society as a whole, more meaningful.

Source: The New York Times, “Among Young Inheritors, an Urge to Redistribute,” Paul Sullivan, March 25, 2013

Categories: Estate Planning

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