Receiving a significant inheritance is a life-changing event that can have a major impact on your estate plan. It’s important to update your estate plan to account for this new wealth and ensure that your assets are properly protected. This blog explores how to adjust your estate plan after a significant inheritance.
Review your ownership structure
After receiving a significant inheritance, the first step is to assess the new assets you’ve inherited. Whether it’s property, money, or investments, your estate plan must reflect these changes. Review your estate structure to ensure that the inherited assets are properly included and distributed according to your wishes.
Update beneficiary designations
Your inheritance may represent a large portion of your estate, so it’s crucial to update your beneficiary designations. Ensure that life insurance policies, retirement accounts, and other financial assets reflect the new inheritance. You may need to adjust who will receive these assets or update any trust beneficiaries.
Create or update your will
A well-drafted will is a cornerstone of your estate plan, especially after a significant inheritance. Make sure your will accurately reflects how you want to distribute your inherited assets, whether that involves passing them down to heirs, donating to charity, or other plans.
Consider a trust
A trust can be an effective way to manage inherited assets during your lifetime and after. A revocable living trust can provide flexibility and control, ensuring that your heirs receive their inheritance without the complications of probate.
Update your powers of attorney
A power of attorney is critical when you inherit significant assets. Ensure that you designate someone trusted to manage your estate if you’re incapacitated. This person should be knowledgeable about your financial situation and prepared to handle your assets accordingly.
Adjusting your estate plan after receiving an inheritance ensures your wealth is protected and passed on according to your wishes. Keeping your estate plan up-to-date gives you peace of mind knowing that your loved ones and assets will be cared for.
