Inheritance: Gifts that Keep Giving

By LouAnn Schulfer, AWMA®, AIF® Accredited Wealth Management AdvisorSM, Accredited Investment Fiduciary® , Published Author |

It’s interesting how often people “compartmentalize” their thinking when they inherit accounts.  That is, when receiving beneficial money, stock or other financial assets, they often think of their newly received account differently than they think of their own money.  Often, inheritors initially feel they need to keep the same investment that their mother, father or grandparent held until their passing.  We talk through this sentimental sensation and oftentimes conclude it’s not necessarily based on the logic of the investment, but rather the emotion connected to the original owner.  For example, a parent or grandparent may have purchased stock that made sense 25 years ago and held it because they did not want to realize the capital gain.  Or, combined with a pension and social security, withdrawals were not needed from a particular account and the investments were eventually an afterthought and not managed.  Different for the inheritor, they may be able to take advantage of stepped-up basis on appreciated assets, unlocking a significant tax opportunity not available to the original account owner.  Or, the beneficiary may in fact be at a point in their lives where they could benefit from income that an investment could produce.


Recently, I had two separate clients inherit accounts from their parents.  One gentleman was the beneficiary of a stock account that had now become third-generation.  Rather than holding the original stock investments, we took advantage of stepped-up basis to liquidate holdings that had significant capital gain and reinvest the proceeds into stock that was more favorable to purchase at the time.  We chose an actively managed all-stock account focused on dividend payers, taking cash rather than reinvesting.  Now each time the stock account pays dividends that deposit into my client’s checking account, he receives a “gift” from his father, which originated from his grandfather.  Pretty cool.


I had another client who inherited a non-retirement account from her mother.  We discussed various options and since her mother was a more conservative investor, favored the option of having some sort of guarantee that she could count on.  Certain annuities can offer riders that guarantee an income stream for the life of the client and their spouse, based on the claims paying ability of the insurer.  A specified monthly income payment that will hit her bank account like clockwork fits well into her financial profile, as neither she nor her husband will have the benefit of a pension in their retirement.  Again, we created a monthly “gift”, this time of guaranteed lifetime income, to my client and her husband, from her mother. 


I really like the perspective of aligning the intention of the account owner to the beneficiary, rather than the investment itself.  In other words, rather than keeping the same investment just for the sake of keeping the same investment, we can build a next generation chapter, utilizing inheritance gifts that keep on giving.





LouAnn Schulfer of Schulfer & Associates, LLC Wealth Management can be reached at (715) 343-9600 or , or


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