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Mishandling an inheritance is common

Receiving a major inheritance can feel like a gift. However, beneficiaries in California should understand that overseeing a large sum of money also involves a lot of responsibility. The mishandling of money may be a result of unexpected fees or bad decisions made due to high emotions. A large percent of people mismanage and lose much of their inheritances.

After inheritances are received, requests for money by extended family are common. When others learn of a person's newfound money, they may believe that they should share in the wealth. According to a financial professional, it is one of the largest problems that an heir encounters. A solution to this uncomfortable position is an attorney or financial planner. They will be the one who discusses the issue with the requester. In this way, it is not necessary for the client to say no to lending or giving someone money.

An inheritance comes with fees and legal expenses. Small estates incur costs that are out of proportion compared with larger estates. Title transfers, property taxes, capital gains taxes, local and state taxes as well as other expenses could be substantial. Therefore, one should immediately consult the attorney who originally put the estate planning documents into effect. The beneficiary may also wish to seek a second opinion from an estate planning professional or another financial adviser. According to a Williams Group study, 70 percent of well-off families lose their wealth by the second generation.

If someone has received an inheritance or is planning for the next generation, then an experienced probate and estate administration attorney could help. The attorney could prepare documents and take actions to preserve and protect the future of an individual's assets. An attorney could handle simple wills or more complex trust agreements.

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