A majority of Americans say that if they hit it big, they would be likely to be generous, reports Financial Advisor in the article “In U.S., Instant Wealth Spawns Philanthropy Boom.” When asked what their first move would be, if they suddenly found themselves with a lot of money, slightly more than half said they would share the wealth with family, friends, and charities.
When asked what they’d do after sharing, one thousand people who took part in a survey from BMO Wealth Management in Chicago knew exactly what they’d do:
A total of 51% said they’d pay off their debts after sharing the wealth. After that, they’d invest in the stock market, buy a business or purchase some real estate (49%). They also said they would keep their financial goals basically the same (43%).
A total of 22% said they’d buy big ticket items, and only 18% said they would splurge and go on a wild spending spree.
Their main concern for their estate and legacy would be helping others, learning how to create a legacy with their windfall and avoiding family conflict over the money.
More than a third of those surveyed (36%) said that a big concern would be to have some help with investment and retirement planning. That was followed by concerns of how this new money would impact their retirement plans, and equally concerning, how they would know who to trust now that they were in a position of wealth. They also said they would have to decide whether to work and wondered if the new wealth would cause any stress.
Anyone who receives a large amount of money with no prior notice, faces a challenge with their new-found wealth. People who win large amounts in the lottery, for instance, are often ill equipped to manage the money. They need help getting their money managed, so that the cash does not overwhelm them—or evaporate.
Today’s new-found wealth doesn’t just come from lottery winnings. With the transfer of wealth between the Boomer generation to their children surpassing the amount of money transferred from the “Greatest Generation” to the Boomers, estimated at $12 trillion, the next few years will see a huge transfer of wealth from one generation to another. Being prepared for that wealth and managing it well, requires advance planning and financial education.
Speak with your Cincinnati estate planning attorney about making charitable giving part of your overall estate plan and maximizing the impact that your giving can have on your tax burden. It’s a win-win for you and the causes that matter to you.
Remember: “An ounce of prevention is worth a pound of cure. ” When making your estate plan or when probating an estate or administering a trust, do not go it alone. Be sure to engage a Cincinnati estate planning attorney.
Reference: Financial Advisor (Dec. 10, 2018) “In U.S., Instant Wealth Spawns Philanthropy Boom”