Making Family Inheritances Less Taxing….

The Denver Post ran a good article on how to smooth the way for harmonious inheritances by families. About to inherit? Tips for avoiding family fights and tax trouble ran at the end of October, 2014. The story opens with some eye-popping statistics

A 2012 study of 3,200 wealthy families by U.S. Trust showed that 70 percent  failed to successfully transfer the family’s assets to the succeeding generation. The study found three reasons for this failure: lack of communication among family members; absence of a generally acknowledged purpose for family possessions; and lack of preparation on the part of heirs.

Following the logic of this study–if it can happen to them, it can happen to any of us, the reporter offers that “[l]ack of preparation, operating without guidance or support and faltering in the face of irreversible tax decisions can negatively impact even diminutive estates.” The author offers tips to avoid these mishaps: effective communication (call a family meeting and be prepared). As well, those standing to inherit need to educate themselves (“Heirs should take the time to educate themselves on the importance of good tax decisions.”) The article gives beneficiaries some insights for them regarding some of the decisions to make and the import of the governing terms of the plans.  Remember to tell clients, tax is important!