An inheritance is sometimes called a “legacy,” and receiving one can be a blessing—or a curse. On the one hand, there is the temptation to think like a lottery winner and imagine a life of easy indulgence. On the other, there is the instinct to do the “right thing” by paying off debts, investing wisely, and saving for the future. The fact that many lottery winners ultimately file for bankruptcy should be sufficiently instructive as to which course you should take.
Whether an inheritance is large or small, the best approach is to avoid extravagance and opt for discipline. Without careful and deliberate planning, a lifetime’s worth of accumulated wealth could be squandered in a matter of months. The following steps will help put you on the right path.
Tax season is upon us, and most people’s first question is what they can do to pay less. The key to a lower tax bill is reducing your taxable income. Several financial maneuvers will achieve this result. For example, you can top off your 401(k) or IRA contributions, sell off losing investments from a taxable account, or ask that your employer hold off on paying you a bonus until after December 31.
Another excellent way to reduce your taxable income is to donate to charity. If you itemize your deductions and give money or property to a qualified organization, the value of the contribution can be deducted from your income.
In addition to giving during your lifetime, you may also want to include one or more charitable bequests in your will. This is a noble gesture, regardless of the amount, but chances are it won’t reduce your tax bill after you are gone.
Roberto and Ian would never leave anything to chance. They ordered their movie tickets online in case the show sold out before they got to the theater. They always bought trip insurance, on the off chance their vacation plans didn’t pan out. They flossed daily, replaced smoke-detector batteries annually, and changed their furnace filters every six months.
Their friends George and Julian often teased them about being so conscientious. But then George and Julian took a different approach to life. When George got a flat tire and needed to use the spare, it was flat, too. The couple once ran out of heating oil because Julian forgot to order more. And they still laugh about the time they missed their cruise ship after enjoying one too many rum swizzles at a pub in Bermuda.
These differences extended to the way they approached estate planning, too.
What is love? With Valentine’s Day upon us, it’s worth grappling with this age-old question. In its truest sense, love isn’t a warm feeling or a tender moment. Love is taking action to help someone who matters to you. “Don’t just tell me you love me,” the saying goes. “Show me.”
On Valentine’s Day, many gay and lesbian couples do take action to show their love for each other—and we often take great pleasure in doing so! Whether we have been together a few months or a few decades, we cook romantic meals, send beautiful flowers, and exchange heartfelt cards to honor our relationships.
Couples who have promised to stay together “til death do us part” should consider going a step further by having “sweetheart wills” prepared. These documents will ensure that if one partner dies, the survivor will be provided for by inheriting the entire estate. The provisions in both partners’ wills would mirror each other, so the outcome would be the same regardless of which one of them died first.
For example, couples without children sometimes decide that when they are both gone, their combined estate should go to their nieces and nephews and a few carefully selected charities. The charities may have an LGBT focus, or they might promote higher education, animal welfare, or the arts.