When asked about inheritance, what enters your mind? Maybe you think about something your grandmother or grandfather, parents, brothers or sisters may have left you after their deaths. Perhaps you are considering a gift you want to leave to your heirs.

Proverbs 13:22 reads, “A good person leaves an inheritance for their children’s children” (NIV). Leaving an inheritance for your children and grandchildren takes a lot of discussion, planning and effort throughout your life.

Inheritances include money, land and other possessions passed from one family member to another. An heir is someone who comes into control or ownership of wealth, belongings or a title through the process of inheritance.

Sadly, even though people make wills and trusts that leave detailed instructions regarding the division of their assets upon their death, confusion and hurt over inheritances is common. Additionally, if not thought through properly, an inheritance can have unintended negative financial consequences to the heir it was intended to help. When you think about leaving an inheritance, you may want to first assume your death occurred yesterday. What happens to your life’s savings in the hands of your heirs with your current plan?

What are some things to consider?

• Talk to your family members about their inheritance prior to your death. While most people avoid these discussions, these conversations can lead to healthier relationships and better understanding of financial principles that will benefit your heirs for years to come.
• Treat all children equally. Many experts recommend this if you want to minimize fighting or hurt between family members. When distribution equally among children is not possible, communicate with your heirs either in advance or write a note to go with your will. In this way, your heirs will have some understanding as to why you set up the distributions the way you did.
• Are your children able to manage their finances wisely? If not, consider setting up a Trust with a few financial strings attached. Some adult heirs may not be responsible enough or seek guidance for lump sums of wealth that may be left to them as an inheritance. For a few heirs, receiving an inheritance speeds up destructive behaviors.

In addition, your life insurance or annuity contracts may offer various beneficiary payout options that you can customize to fit your heir’s needs. These arrangements can provide installment-payout options that can be paid out regularly to the beneficiary over years, rather than in one lump sum.

• Do your heirs have any “special needs” that need to be considered? This would include mental or physical disability that require ongoing care. If not done properly, an inheritance could disqualify them from the public assistance they require since benefits are based upon need. Most states have rules to qualify for public assistance. One rule known as a “Spend-Down provision” requires the individuals receiving public assistance to have little or no savings or investments.

Establishing a special needs trust using the HEMS standard can be used. “H-E-M-S” is an acronym for health, education, maintenance and support. An inheritance placed in a special needs trust using the HEMS standard will not put at risk the needed public support. These trusts can provide terms and instructions to support heirs over a selected period of time or their whole lives. A special needs trust can be established before death or through a testamentary provision in a will.

The rules that manage how someone gives or receives an inheritance can be complex. The laws and customs for transfer- ring the wealth of one person to another vary from state to state and nation to nation. Being in a position to fulfill Proverbs 13:22 means we need to start planning now. Start having conversations with your heirs and seek qualified advice. This will benefit your heirs both now and after your death.

What kind of inheritance will you leave behind?