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Newport Beach Estate Law Blog

How fast do people spend an inheritance?

You spend years building up your wealth. Maybe it takes decades. You put money and assets aside to pass on to your children.

But how long is that really going to last? After you leave the money to your children, how fast do you think that they're going to spend it?

It takes time to get the kids ready to take over your company

Do you own your own company, and are you trying to figure out how to pass it on to the children when you pass away? Business succession planning is very important on many levels -- for the company, the employees and your family. Therefore, it's crucial to do it properly.

One thing you need to consider is that your children may not be ready to jump in and run the company immediately. It takes time to get them ready and train them to do the job. Just because they work for the company, that does not mean they are prepared to take over.

More people are having children later in life

As social trends continue to change, the typical age of a first-time mother keeps getting older. This can have a big impact on estate planning for those who have children later in life.

Over the last two decades, per the Pew Research Center, the number of mothers who are at least 40 years old has tripled. Technically, reports claim this is for those in their mid-40s or older, so you're talking about a lot of people who are 45, 50 and older.

The big reasons why life expectancy keeps falling

It seems like every generation should live a bit longer than the last, right? We invest so much time and money in technology, medicine and related fields. We understand the human body in ways people couldn't fathom not that long ago. Many medical technologies that seemed like science fiction to our grandparents are now very real.

However, the reality is that life expectancy in the United States has continued to fall. The drop isn't big -- a tenth of a year, in one study -- but it's still going to wrong way, doing the opposite of what you would expect. Why is this?

Protecting assets during divorce matters for financial stability

Nobody wants to lose their financial stability after their marriage fails. Reliable financial income is crucial to overall peace of mind and personal well-being. The transition from marriage to divorce is not always easy when large financial shifts are made, especially when you have the most to lose.

One of the greatest mistakes people make when it comes to protecting their assets is making emotional decisions that have lasting consequences. Don’t make a permanent decision in a temporary situation. Many people fail to seek sound legal counsel when they are faced with a major life transition like divorce or marriage.

Does birth order matter in business succession?

Business succession planning gets complicated when you have multiple children. Who wants to be involved? Who deserves it? What is best for your company? What is best for your family? These are just a few of the questions you have to ask yourself.

One other thing you may want to consider is birth order. Many experts believe that it plays a role in the personalities that children have, which they then carry with them for the rest of their lives. And, they say, a firstborn child is more likely to be a leader. Some have specifically gone so far as to say that it's more likely they'll become CEOs or found their own companies.

Giving the kids money now could massively change your estate plan

Estate planning involves, among other things, determining how to leave your money to your children. When you pass away, your wealth goes to them. You simply need to figure out the best way to do it.

But what if the children need that money now? Giving it to them in advance could have a massive financial impact on your future, changing your retirement plans and your estate plan.

Students have more than $1 trillion in debt

According to recent reports on the financial situation that American college students face, it's not looking too good for them. They have in excess of $1 trillion in debt. While not all of that debt comes from student loans, they're the main issue.

It's an astounding number. In a society where we tend to tell all children to go to college to get ready for the working world, we're seeing students take on debt at record levels to make that happen.

Women live longer than men: Get your estate plan in order

While both men and women need to do proper estate planning, it is especially important for women because they tend to live longer than men. This means that the odds are higher that the last surviving spouse in an opposite-sex marriage is going to be the woman. Even if she simply gets her husband's assets when he passes away, it is then up to her to pass those on to the rest of the family.

Have you ever wondered why women tend to live longer? Researchers have found numerous potential reasons, which include:

  • Women do not smoke as often as men.
  • Over the years, advances in medicine may have helped women more than men because women used to be at greater risk of passing away from infectious diseases.
  • Men have more visceral fat around their organs, increasing the chances of cardiovascular disease.
  • Many animals show the same pattern, with the female animals living longer than the males, suggesting it is something of an inherent trait.
  • Women tend to visit the doctor more often than men, suggesting that they are faster to seek professional help when needed.
  • Mortality rates for children take a heavier toll on boys than girls in most places, dragging down the average life expectancy of men since more of them pass away at such an early age.

Get your children involved in your company early

With your business, passing it down in the family has always been your plan. You built this for them. You want to do more than just provide for them when they're young. You want to give them a way to earn and find financial security for the rest of their lives.

Now, you cannot force them to want this, as well. They may decide they want to take a different path in life. But you can still give them the tools for success and help them work toward that goal.

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The Soto Law Group
1101 Dove Street,
Suite 200
Newport Beach, CA 92660

Phone: 949-945-0415
Fax: 949-945-0197
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