Receiving an inheritance is like winning the lottery. What could possibly be wrong with that?
Callie Rogers, age 16, won $3.1 million in a British lottery. By the age of 22 she was broke, living with her mother, and working three cleaning jobs. William Post won $16.2 million in the Pennsylvania Lottery in 1988. By the time he died in 2006, Post had gone from scooping up annual lottery payments of $497,953.47 to scraping by on $450 per month in disability compensation. Jack Whittaker won what was then the largest Powerball payout in history. It took him four years to blow through $113,386,407.77 of his winnings. The impact on himself and his family was catastrophic.
These examples show how a sudden windfall can turn from a blessing into a curse. The lesson applies to all of us. Instead of giving your loved ones direct access to what you leave behind, consider protecting any intended beneficiaries whose youth, bad habits, or bad friends might turn your gift into dust and destruction. By placing their inheritance in trusts, administered by people or institutions who will provide good judgment and wise guidance, you can protect your legacy with wise planning.