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Things to consider when choosing an heir

As of January 1, the tax laws allow for taxpayers to avoid estate taxes up to the amount of $5.25 million and $10.5 million for couples. As great as this may be for the 'ultrawealthy,' there may be concerns about leaving these large sums to their heirs. As we have seen over the past decade or so, the children of this ultrawealthy class don't seem to manage their affairs particularly well, and often find themselves embroiled in tabloid drama. The Wall Street Journal addressed this question in an article entitled "Can you trust your kid with $5.25 million?"

Many people who are planning their estates may have similar concerns when choosing heirs and the amount to give to them in their wills. Though most families don't have $5.25 million to give to an heir, the article still presents an interesting question: can the potential heir handle and manage the amount they're given? Obviously, much of this capacity is based on age and maturity level, but there are legal options in estate planning that can help to control how and when the funds are used.

The article gave a few tips to aid with this question, one of which was 'keeping it quiet.' If the heir is not aware of the amount they will be given, they will not be able to depend on the funds and will be forced to live their life 'normally' until the funds come unto them.

Speaking with an experienced estate planning attorney can present options to ensure that an estate is well-cared for, and the wishes of the decedent are respected and followed.

Source: The Wall Street Journal, "Can You Trust Your Kid With $5.25 Million?" Kelly Greene and Arden

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