Podcast Episode 389: What to Do if You’re Worried About Leaving Your Child a Large Sum of Money
Estate planning can be difficult enough on its own but what happens when you’re hesitant to leave behind a large sum to a child who might be lacking financial responsibility. This challenge is the focus of the latest episode of the Money Wisdom podcast with Jake Doser, CFP®, CPWA® and Nick Colantuono, CFP®. They tackle a common concern shared by many parents: ensuring their wealth is managed wisely after they’re gone.
In this episode, Jake and Nick delve deep into the nuances of beneficiary designations. They explain how factors like the type of account and your state of residence can significantly influence the inheritance process. It’s important to clarify the differences between bequeathing money through a will versus opting for a more sophisticated trust planning approach. You also need to be aware of the potential pitfalls, such as the risks of not designating a beneficiary or relying solely on a will, which can lead to unintended consequences.
A key theme of the discussion is the importance of proactive planning. Beyond estate considerations, you have to be cognizant of the tax implications of each of your decisions. That’s why we always stress the need for updating beneficiary designations and encourage you to explore the benefits of trust planning, especially when the beneficiary may struggle with financial management. Trusts offer a structured method to distribute wealth, ensuring it is used wisely and not squandered.
Furthermore, we want to underscore the value of open communication with potential beneficiaries. Have honest conversations about future financial plans to prepare loved ones for the responsibilities that come with an inheritance. This proactive dialogue can prevent surprises and ease the burden during times of grief.
It’s always good to meet with an estate planning attorney as well as consider tax strategies like Roth conversions to reduce the tax burden on beneficiaries. If you want to learn more, visit one of our complimentary workshops for more personalized guidance.
Here’s what we discuss in this episode:
0:00 – Intro and question
0:47 – Common situation for families
2:06 – Types of accounts matter
4:50 – Ways to lower taxes
6:01 – Will vs trust
4:34 – Main consideration
Information presented in our podcasts is considered current as of the created date. Over time, some information presented may become stale. We recommend you consult with your Financial Professional before making any changes based on information contained here.
Johnson Brunetti is a marketing name for the businesses of JB Capital and JN Financial.
Investment Advisory Services offered through JB Capital, LLC. Insurance Products offered through JN Financial, LLC.
The guarantees provided by any type of insurance contract are based on the claims-paying ability of the insurance company.
Related Resources
-
Most Asked Social Security Questions
It’s no question that Social Security plays a crucial role in retirement planning, helping to provide a stable income stream for millions of recipients. In this week’s Better Money Boston with … -
Podcast Episode 402: How Often Should You Meet with Your Financial Advisor?
A good relationship between a client and their financial advisor relies on clear communication and regular check-ins to ensure everything is on track. In this episode of the Money Wisdom podcast, … -
Think Like the Rich
As you enter retirement, your financial focus shifts from growing your wealth to preserving your assets and generating income. In this stage of life, adopting the mindset of the wealthy can go a l… -
Leaving a Lasting Legacy
Estate planning can be a difficult yet necessary conversation to have with your loved ones. Everything from the distribution of your assets to your wishes regarding end-of-life care is up for disc… -
Right Time for Social Security
Contrary to popular belief, waiting to claim Social Security until age 70 to get the maximum benefit is not the best decision for everyone. So, when is the right time? In this week’s Retire Wis… -
What is the Social Security Fairness Act?
You may have heard about the Social Security Fairness Act, which was signed into law on January 5, 2025. But what is it and who does it help? In this week’s Money Wisdom Question Series, Ian Fe… -
Finding Your Way on Taxes
Taxes can be confusing on any given day, but in retirement, they require even more attention and understanding. In fact, taxes are at the core of nine out of every ten conversations we have with t… -
How to Effectively Plan for Healthcare in Retirement
As you approach retirement, the reality of rising healthcare costs becomes clearer. When planning for this significant expense, it’s important to consider all aspects – from prescription drug cost… -
Case Study: Steps to Determine How Much Money You Need
Imagine you’re 63 and ready to retire, with plans to live on $80,000 a year. The question is: how much should you have saved by that time? Nicholas J. Colantuono, CFP® joins Better Money Boston… -
Planning for Your Final Wishes
At its core, estate planning provides security, peace of mind, and control over your legacy. The way you choose to pass on that legacy is a personal decision that warrants careful consideration. …
