The pros and cons of inheritances are often discussed when you are engaged in estate planning discussions, and there are no easy answers. More often than not people who are in a position to have to make decisions regarding whether or not a large inheritance is good for their heirs usually got there because they are driven individuals. These types of people are often going to take pause because they want to see their loved ones maximize their potential and experience the feeling of doing for self. So there is a delicate balance between clearing a traversable path and paving the gilded way.
This having been said, we live in interesting times that have completely transformed the age-old conundrum outlined above. The idea that successive generations can simply bootstrap themselves to wealth the same way their ancestors did is not in step with current economic realities. Yes, it is true that one can still make it on his or her own, but the playing field is simply not the same as it was, and the goal posts have not only been moved but they are still traveling.
Home ownership has always been at the core of wealth building in America, but with the real estate market being what it is appreciation is no longer a given. So the simple strategy of putting money into your house, watching it grow, and being able to take money out of it if certain investment opportunities present themselves is no longer universally viable.
Working Americans who built wealth at least a generation ago were not competing with a global workforce. This added competition coupled with high unemployment has helped to keep wages stagnant. So the whole “American Dream” paradigm of an upward career trajectory coupled with ongoing raises and a home that is continually rising in value has become nothing more than a memory.
It’s a new day, and when you are planning your estate and taking stock of your assets, consider the fact that it may not be possible for your heirs to enjoy the kind of financial success that you were able to achieve, try as they might. How this should impact your inheritance plans is for you to decide.
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