Leaving loved ones from the next generation even a little better off is a goal shared by all working parents. Analysis of inheritance trends reveals that most are indeed managing to pass some level of assets on to their children. Not surprisingly, the wealth gap plays out in estate planning, skewing what “average inheritance” actually means.
Pick A Number…
Googling around about “average inheritance” results in numerous answers, and may paint the picture that most families are leaving big bags of cash to the next generation. However, digging in a little further, the impact of the wealth gap becomes apparent, and a truer to reality snapshot of average inheritance is revealed:
While it appears that the “average” inheritance is between $100,000 and more than $1 million, even this broad range of numbers can be incredibly misleading.Because the very rich have so much more money than the middle and lower classes, the average inheritance numbers are incredibly lopsided.When you break down average inheritance by the economic status of the household, the numbers look very different. According to analysis by Demos:
- The least wealthy group of families have received, on average, $6,100 in inheritance.
- The wealthiest 1 percent of families have received, on average, $2.7 million in inheritance.
A further breakdown of these numbers reveals that: “the wealthiest 1 percent of families have inherited $447 for every $1 the least wealthy group of families has. Those in the middling wealth ranges—$25k–$50k, $50k–$100k, and $100k–$250k—have received inheritances of $14.8k, $22.5k, and $51.4k respectively.”
The Importance of Care and Estate Planning For All
Although “the wealthiest in the United States are able to leave behind very large inheritances and this skews the average numbers to be nowhere near average for the majority of retirees,” regular families should not throw in the towel when it comes to proactively creating care and estate plans. As we live longer lives, organizing the resources we do have to ensure we don’t outlive our funds, is in and of itself an important gift for the next generation. For example, if publicly funded caregiver assistance could become a necessity, establishing an irrevocable trust, in advance of when help is actually needed, is an important step toward qualifying down the road.
As to planning for the assets you hope to pass along to loved ones, it’s important to get organized about how you will do so, and these estate planning tips will get you going. Remember, whether you have a lot or a little, efficiently gifting money can be life changing for your beneficiaries. Consider, for example, that $6,000 can put a dent in loan repayments, $12,000 could be a real boost toward starting or finishing a degree, and $24,000 may provide the final lift needed for down payment on a home. These days, with so much hype and conspicuous consumption all around, it’s also important to keep all the other important gifts we can give front of mind:
Many households share their wealth with younger generations while they are still alive. Parents and grandparents pay for their offspring’s education, joint vacations, and even living expenses. Many households also help family members buy houses or cars and pay off debt … .If you cannot afford to leave behind financial wealth (and even if you can), remember that inheritances can come in many different guises – your culture, values, sense of humor, and more.
Good To Know
When creating and updating estate plans, it is also essential to ensure the loved one, friend or professional designated to serve as your fiduciary understands your ultimate goals, and has the detailed information needed to carry them out. Depending on your circumstances and region, your fiduciary may be specifically referred to as an executor, trustee, or personal representative. Regardless of the details of your estate plan, the fiduciaries you appoint have a legal responsibility to carry out your affairs, in accordance with the intentions set forth in your will and or trust–and the law. When representatives are designated, fiduciary bonds, alternatively referred to as estate bonds, may be required.
Learn more about estate bonds right here. At Colonial, a leading national provider of all types of fiduciary bonds, the steps to obtaining estate bonds are easy: get a quote online, fill out the information, and enter a payment method. Print or e-file the bond from anywhere—even the law office.
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Estate Law Practice?
Colonial Surety is here to help speed things up whenever and wherever a bond is needed. With a few clicks, you’ll arm your clients with exactly the bond specified.
Just log in to The Partnership Account® for Attorneys, choose a bond, send it to your client for payment, then download, e-file or print the bond. Specific obligee requirements? Trust us: Colonial’s a direct bond writer, so our experts are here to ensure the requirements of obligees across the country are properly met.
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