[USER]

Parents (mid 70’s) recently received a large inheritance (7 figures) and need guidance on what to do next. (We grew up very middle class and lived a frugal lifestyle.)

1. They would like to divide some of it amongst 8 grandchildren, but unsure how to do this equitably. Some grandchildren are out of college, youngest are in grade school. They mentioned putting money in CDs. Is this a good option?
2. They would like to gift some money to 4 children by writing each a check
3. Both need to create a will / estate plan

My advice is to start with a fee only/ advice only financial planner to better understand their options and map out a plan. Then they can work with an estate attorney to setup wills / trusts / estate plan.

They can hold the money in a few separate banks until they know what to do with it. I think they should also consider their own long term care and keep some money aside for this.

What am I missing? What else is there to consider? Next steps?

Advice is much appreciated.

[Casi]

I would strongly recommend a elder law attorney as their first stop before giving ANY money to anyone else.

There needs to be a plan in place for their own care through the end of life.

[Shawnda]

I think they should keep it & distribute what’s left after they pass. Elder care is super expensive. They might need those funds.

[Rebecca]

Tell them to tell no one of this inheritance. You don’t want people asking for loans.

[Wendy]

I must admit, not something I know much about or given much thought to cuz this doesn’t apply to me. However, the one thing that they might want to consider is the amount allowed each year to avoid gift tax (being paid by them as the gifter).

I think it’s something like 15K per person per year. I’m sure someone will correct me.

With 12 people (4 kids, 8 grandkids) that’s a six figure sum. This also means that they wouldn’t be giving all the money away at once in case circumstances change for them.

[Jill]

They need to invest/keep this money for themselves. Set up their wills so it’s divided among kids/grands after both are gone. They could live 20+ more years and may need the money for LTC expenses. If not, it will grow. Grands will be old enough to handle it then, and adult kids will get it in time for their own retirement.

Unless they inherited in the upper 7 figures, or are super-prepared for retirement, don’t treat this like a lottery win.

[Emma]

Probably not what you want to hear but they should sit on it for a minute to figure out every alternative first.

They need to prepare a nice tax shelter and figure out where is the best place to hold on to this money.

Evaluate on an individual basis everyone’s position in life and decide how the money would best serve them.

Gifting a baby $15k is not the same as gifting an 18 year old $15k.

They should also do 1 or 2 things that has always been a dream of theirs FIRST.

Secure their retirement (airtight) then worry about everything else.

They also shouldn’t talk about the money. If they do this right, their decision on how to spend it will be clear by next year.

Congratulations and good luck

[Author]

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