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You won't magically know how to handle millions of dollars just because it's your name on the assets.

In this episode, I pull back the curtain on what nobody tells you about building financial literacy as an inheritor and why it's totally normal to feel overwhelmed.

As someone who's been there (yep, I'm an inheritor too), I'm sharing the exact building blocks you need to understand, whether you're actively managing inherited wealth or preparing for a future inheritance. 

No more feeling like you can't ask "basic" questions if you're inheriting a huge amount of money.

And if you've ever felt frustrated trying to talk to your parents about their estate plan, I'm giving you the exact terms and concepts you need to know to have those conversations like a pro. 

Skip the Google spiral and join me for  real talk about managing generational wealth.

🗓️ Schedule a FREE call to talk about whatever money questions are on your mind.

Transcript:

Hey, I'm Katherine. Thanks for joining me at Heir Necessities, the podcast that turns complex financial concepts into real talk for GenX, Millennial, and Gen Z inheritors.

I'm a CERTIFIED FINANCIAL PLANNER®, an investment advisor, and an inheritor, just like you.

Each week on the podcast, I'm breaking down a different topic related to generational wealth and inheritance.

Listen in to get the information you need as a current or future inheritor and learn how to manage your financial life yourself - not by asking Google what to do.

Understanding the Inheritance Challenge

On today's episode of the podcast, we're talking about how to grow your financial literacy as an inheritor. This topic is for current and future inheritors alike, and it is by far and away one of the biggest questions that I get asked in my role at Sunnybranch. It's one of the biggest issues that I have prospective clients coming in to talk to me about.

You have this huge amount of wealth, whether you've already inherited it or you expect it's going to be coming to you in the future, but you have no idea how to manage money. You were never taught financial literacy. You might not have even learned basic financial literacy, let alone all of the skills that wealthy people have to manage their wealth.

You don't understand how investing works. You don't understand the legal and the tax structures that surround your current or future inheritance. You feel like you're flying blind.

If you've gotten to this point where you're in your 20s, 30s, or 40s and feeling this way, it's probably because your parents aren't a huge help in terms of your own financial literacy. If you had parents who were able to effectively communicate these topics and work to grow your financial literacy as their child, you probably wouldn't be in this position where you're looking for this information.

You need to find these resources yourself, but where? You can't talk to your friends about this. You can't talk to them about their $30 million inheritance or their parents' wealth because most people don't have this issue. A lot of investment advisors, especially if you haven't inherited yet, don't care about you. They're not gonna work with you. They might work with you after you've inherited, right? But they don't care about educating you now.

Building Financial Literacy Foundations

There are not a lot of people in the financial industry that do what I do at Sunnybranch, which yes, is also to help current inheritors manage their inheritance to manage their investments, but also to help current and future inheritors grow their financial knowledge, their financial literacy, and grow their understanding and comfort with topics related to inheritance. And that's what I'm gonna be giving you an overview of today.

The very first thing that I always start with, no matter who I'm talking to, are the very basic building blocks of financial literacy. And no matter how much money you have, these building blocks are the same. They are about income, saving, and spending.

You need to understand how much money you have coming in, how much money you're spending, and how much money left over is being saved. Then you need to understand where that money that's being saved is going, if it's being invested, how it's being invested, and how it's growing over time.

This sounds really simple and some people listening are probably rolling their eyes right now. But it's actually really hard, especially if you've already inherited. If you were living off of a salary and it was really stable and you knew how much your paycheck was gonna be every week, and now you have an inheritance, even if it's a very large inheritance, 20, 30, 40 million dollars, you don't necessarily understand how much money is going to be coming off of that inheritance, how much cash flow that you're gonna have on an annual basis.

Essential Estate Planning Knowledge

For a lot of people, their parents are not willing to have these conversations with them. They still see you as a child. And because of these fear-based messages that they're getting from their advisors, if you have more questions about those, you can check out a couple episodes ago, I talk all about why your parents won't talk to you about their estate plan.

If you're a future inheritor in this situation, you're gonna wanna focus on understanding the mechanics of estate transfer for high and ultra-high net worth families. There are a key few terms that you need to understand. And if you listen to this episode and you feel like you wanna dive a little deeper, I do have the "20 Terms Inheritors Absolutely Need to Know." You can download it from my website.

The first thing you need to understand is the kinds of documents that your parents may have in place about their estate plan. So I'm talking about wills, trusts, powers of attorney, and a medical power of attorney or a healthcare proxy. Your parents might not have all four of these, but most people are, most wealthy families especially, are going to have all four of these documents.

A will governs your parents' entire estate and provides specific instructions legally for how the estate should be distributed. A trust is slightly more specific and also endures longer. A will gives instructions for a specific event at the disposition of an estate, but a trust could last generations, decades and decades into the future.

Power of attorney is a form that gives an individual authority to act on behalf of someone else and a medical power of attorney or a healthcare proxy is a similar document but it gives someone permission to make medical decisions on behalf of someone else. The power of attorney and healthcare proxy or medical power of attorney are documents that could come into play if your parents are incapacitated at the end of their lives but that aren't gonna matter after they die and the will and the trust are two of the documents that are really going to matter after your parents die.

Navigating the Inheritance Process

If you're a current inheritor and you're going through the estate settlement process right now, then you have a huge amount of financial knowledge and financial literacy that you need to learn in a very short amount of time. You're learning about the role of executor, you're learning about all of these different account types that your parents had, how all those different account types are gonna transfer, what the tax implications are for all of those accounts.

In your parents' will, they will have named an executor or a personal representative. And that is the person who's legally responsible for fully distributing their estate and making sure that it all complies with their wishes as they were laid out in the will.

The other person who might play a role in this is a trustee. If your parents had a trust that already existed or a trust that was created upon their death, the trustee is also gonna have a lot of specific information about that trust. And so if you have specific trust questions, then the trustee is the person that you would go to there. That might be an individual or it might be a corporate trustee.

Resources and Next Steps

What I wanna leave you with, if you listen to the end of this video and you feel like, "Man, you gave me some tips, but I really still don't know what I'm doing here," is that is normal. You can't listen to one 15-minute podcast episode and then say, "All right, I'm ready to go," because you have a new job, you have a new skillset that you're trying to learn, and that is a longer-term process.

If you have specific questions that you're struggling with, you can:

• Book a call

• Email me questions at katherine@sunnybranchwealth.com

• Follow me on IG @sunnybranchwealth

But I wanna hear from you what issues you're struggling with and what you want help with. And that's the way that I can make this podcast the best resource it can be for all of my current and future inheritors is if you share with me the issues and the questions that you're really wondering about.

I'll hope to hear from you soon and if you don't have any specific questions you can catch me in two weeks on the next episode of Heir Necessities.

Let’s take the next step together

Understanding how to manage and invest a current or future inheritance is not easy. Inheritors can encounter a wide variety of different situations requiring knowledge and finesse to manage. If you need more help, you can reach out to Katherine Fox, CFP® and CAP®, a financial planner for inheritors to learn how Sunnybranch can help you understand and plan for your future inheritance, whatever goals you’re trying to meet.