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Mention that hardly a book on Amazon on how to spend other than usual how to budgetInheritancesWealth
If you buy a car you have to learn to drive before you can use it. If you have a computer , you will have a manual and instructions. Even a washing machine comes with a manual.
Generally however there is little guidance left as to how best to apply and use inherited wealth, Money is called currency as it flows, like a current. It has have a powerful influence and a devastating effect. Yet it is assumed that people will know how best to use and spend it wisely. Experience shows that this is not the case and the greater the wealth the lesser it is usually applied sensibly and usefully
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Liquidity
Importantly when the estate assets are sold, the amount will be liquid and capable of easy disposal. Even when alive the person leaving the wealth, would not have had that amount of liquid wealth at his disposal, and would not have been able to consider how best he might spend such sums himself. Think of the task beneficiaries will have in spending what is left to them, most of which will be capable of being turned into ready cash.
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GuidanceIt therefore seems sensible to leave some guidance as to the best use of the wealth at the very least. Your beneficiaries then have the option of following your guidance, in part or more substantially. Most people do not leave such guidance and one of the aims of this site is to encourage people to do that. You do not have to include Incentives in your will, you can pass on your guidance in other ways, such as Letters of Wishes. Very often people have concerns about how well their wealth might be applied but are unaware of how best their wisdom can be applied when they are no longer here.
" Money is like muck, not good except it be spread "
Sir Francis BaconSoOoooo
Guide on how to spend moneyRepeat that even a washing machine comes with a guide, If you drive a car you will have learned to drive.In case of wealth it is generally assumed that the beneficiaries will know how to spend the inheritanceWills are instructions and commands. The pile of clauses is mostly designed to deal with tax or trusts.The only thing certain in life besides death is uncertainty. Not much you can do about death but may be able to get a little certainty by suing incentives well.The traditional objectives of wealth management post death, are to safely maximise capital, which is a sensible aim. With good use of incentives consideration may be given to broader strategies so that the best use if made of inheritances.
There are more affluent individuals living today than ever before.Counterbalancing influences and flexibility. BEar in mind that the law, the family and society changes over timeAccording to data from the Federal Reserve in America ( analysed by moodyseconomy.com ) the overall sum of inheritances has grown to nearly 200 billion dollars annually, more than three times the amount that was passed down in the mid 1970’s after accounting for inflation.Paul Schervish and John Havens of Boston’s College Center for Wealth and Philanthropy predict that by 2050 25 trillion dollars will be passed to offspringMost of the inheritances will go to a small minority of the already wealthy. At the same time analysis shows that the average American will inherit much less than before.“ The single wealthiest generation to have ever lived is getting ready to pass on trillions of dollars. What impact will and should this wealth have on future generations and society ?Make more of above statement and show what 25 trillion dollars is in the context of money supply in general.Also an examination of the kinds of things that great wealth buys, rarely what is needed but mostly what is desired, and these are un bounded desires, for example and set out lists of very expensive but not necessary things.“ The primary goal of Estate Planning should be to preserve the Family, not simply to protect and preserve family assets “The Journal of Financial Planning
LiquidityFew people who leave great wealth have ever had that amount of wealth in liquid form at their immediate and ready disposal. It is therefore not reasonable to expect that beneficiaries, even fairly adult ones, will be able to wisely and properly use their inheritances.
Expand upon thisIn usual wills age limits are set before the inheritance if given over absolutely. The belief seems to be that simply because a certain age is reached that maturity and wisdom will have arrived. This is not always the case and wisdom and awareness are gained by experience not just by ageing.Money is known as currency as it flows like a current. Money is probably the most powerful force in society and it should flow well and be applied usefully. Sadly it too many instances greed stops, wastes and dissipates the flow.
Expand on thisThe wealthy whether by effort or inheritance need objective advice from independent advisers. The crucial thing is to look at things from a relative standpoint. Regretably because the wealthy are surrounded by wealth it becomes difficult to be objective even in simple matters, let alone more complex issues. A clear vision is needed to look at the wealth from several sides including your own. This is an important consideration in disposing of wealth great or small.A good start is to consider the good that your beneficiaries might do for themselves and society, rather than to shrug and say that it is up to them , they can do what they like.
Flagging up here that should have a discussion on rationing so that precious metal and other resources are not used up in making expensive cars or jewellery. Innovation is fine, but novelty is usually a waste of the precious resources of the world and also encourages resentment.The powerful force of wealth should not ever be left in the hands of the incapable and the inexperienced as they will too easily fall prey to the branding and marketing merchants and uselessly dissipate even well earned fortunes.Whilst there are changes being made to inheritance taxes, the rates are generally considered too high by those who have much to leave. Hence there is resort to tax saving schemesSee whether wish to clarify taht wealth is not my subject, not an expert, but some small glimpses relevant to incentivesAlso can cover here about motivation and other aspects of incentvesUnder making also place incentivesThe people section should be done well and can sub categoriseState that articles and more follow on each of these subjectsNot writing for any comment or feed back though such is welcome , am writing to inform