Factors to Think About When Leaving an Inheritance to Your Children

A retired man spending good times with his daughter

According to a 2017 survey, 77% of American parents plan to leave an inheritance for their children, but only 64% are prepared, whereas only 50% have a solid plan in place. Some retirees leave assets and money, while others see it as a non-essential action.

As a parent, you may want to pass down a financial inheritance to your children. You should keep in mind certain considerations we have outlined in this guide. Click here to hire a lawyer for estate planning in Manhattan.

Things to Consider When Leaving An Inheritance

Whether you leave an inheritance for your children or grandchildren will influence your retirement plan. You should consider factors such as healthcare costs and income needs.

Income Needs

Some retirees pass their retirement savings to their children, which is a nice gesture. However, assessing your income needs is important before making gifts for others.

You can use a retirement calculator to determine how much you should save and how much you can withdraw each year after retirement. Consider taxes and inflation and diversify your income investment and growth portfolio.

Healthcare Cost

The rising healthcare costs and the risk of illness are the two biggest risks that can affect your retirement income. Government programs may help a little with nursing home payments. For instance, Medicare covers a little amount of nursing care, whereas Medicaid pays for long-term care on the condition that you spend all your money first.

With that in mind, you can’t transfer your assets to children to be eligible for Medicaid. This program prohibits asset transfer several years before a nursing home stay.

You can protect your assets from healthcare costs through long-term care insurance. These insurance policies are expensive, so you should be careful.

Tax Implications

Inherited assets such as mutual and stock funds qualify for favorable tax treatment. If you leave these funds for your children, they may save significantly in terms of tax.

Nest Egg

If you outlive your retirement fund, chances are your children or grandchildren will pay your bills, at least some of them. It’s better to manage your nest egg to avoid asset depletion.

You can buy an annuity with retirement money to receive a guaranteed amount for as long as you live.

A family lawyer drafting an estate plan

Hire A Lawyer in New York for Estate Planning

Ledwidge & Associates, P.C. offers trusted legal advice for estate planning in Manhattan and Queens. Our Litigation lawyer Brooklyn assure individualized and professional service based on your needs. Our lawyers will cover all the complex aspects of estate planning NYC, including setting up trust funds, inheritance, guardianship, and more. Contact us today!




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Factors to Think About When Leaving an Inheritance to Your Children

Ledwidge & Associates

Ledwidge & Associates, P.C. in New York City has years of experience helping clients create estate plans that fit their needs. We have the experience and resources to handle your critical legal matters with the utmost care and attention to detail.
Factors to Think About When Leaving an Inheritance to Your Children

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