Children face 'sudden wealth syndrome' as Harris' rise worries parents rushing to transfer billions to their children before 2025 benefit expires

By admin On Sep 20, 2024 0

A major tax incentive is set to expire in 2025 as many wealthy parents rush to transfer their assets to their children. Kamala Harris gains ground in the polls ahead of the 2024 presidential election. However, this rush has raised new concerns about the emotional toll that sudden wealth takes on children, a phenomenon known as “sudden wealth syndrome.”

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What's happening?

Currently, individuals can transfer up to $13.61 million tax-free to family members, while couples can transfer up to $27.22 million. But this generous tax benefit is set to expire at the end of 2025, and the amount is likely to be cut in half. This change is prompting ultra-wealthy families to act quickly and transfer large sums of money to their children before the deadline closes.

Wealthy parents are under pressure to provide money for their children as soon as possible because Harris advocates for more taxes on the richThey are concerned that a Democratic president might implement tax laws that would be less advantageous to them.

But while they are focused on protecting their children's financial future, they are also concerned about the impact that suddenly receiving so much money could have on their well-being.

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The risks of sudden wealth

Sudden wealth syndrome is a real challenge for people who suddenly receive a large amount of money. Children who inherit huge sums of money or receive unexpected wealth may experience overwhelming anxiety and uncertainty about what to do with all their new income.

Wealth Advisors They are urging families to think carefully before making these transfers, not only about the tax savings, but also about the impact on their children's mental health and future.

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What's at stake?

According to a report, “There is a lot of media coverage of millennial and Gen Z heirs, but Gen X will be the first to inherit from their wealthy parents.”

It is also claimed that over the next 10 years, around 1.2 million people with a net worth of $5 million or more will pass on to their descendants more than $31 trillion. Nearly two-thirds of this will come from the ultra-rich, those with a net worth of $30 million or more. All in all, around $20 trillion will come from just 155,000 of the richest individuals.

Educate children about financial responsibility Before they inherit a fortune, it can help them feel more comfortable managing their estate. Some families are setting up phased inheritance plans to ensure their children don't receive all the money at once, while others are seeking professional help to guide their children through this major life change.

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This article Children face 'sudden wealth syndrome' as Harris' rise worries parents rushing to transfer billions to their children before 2025 benefit expires Originally appeared in Benzinga.com