How Can Millennials Protect Their Future Inheritances

“How should Millennials prepare for the inheritance they may receive?”

What would you do if you suddenly won the lottery? Are you mentally prepared for such a significant financial change? The same idea applies when someone receives an inheritance. It may be expected, but the timing is usually unexpected.

Although it may not arrive all at once, the decisions you make early on can significantly shape both the short-term impact and the long-term outcome of your financial future.

From taxes and debt repayment to investing, real estate, and legacy planning, an inheritance presents a series of choices that deserve thoughtful consideration, without any rushed, knee-jerk reactions.

Knowing whether you may inherit real estate, investment accounts, a business, retirement assets, or personal property can help bring clarity to your own planning. However, you may find that having these conversations with your parents (or grandparents) may feel uncomfortable, emotional, or insensitive.

For many Millennials, experiencing the emotion of receiving wealth, especially after the loss of a loved one, adds another layer of complexity to the transfer process. The emotional loss offsets the positive impact of the inheritance.

A financial planning expert can help you understand what you may inherit, how those assets function, and the role they might play in your long-term financial strategy.

Connecting your future inheritance to your “why.”

A key part of preparing for inherited wealth is understanding your personal “why”: the values and priorities that guide your financial decision-making. Brown|Miller can help you align these values with your long-term financial plan so the inherited wealth supports the life you want to live.

Read our Quick Guide “6 Ways Goals-Based Planning Puts Investors First.”

“How should Millennials plan for retirement while managing debt, rising costs, and competing priorities?”

As a Millennial, you may be facing some unique financial pressures, such as:

• Student loan balances remain high
• Housing costs have outpaced income growth
• Childcare costs can equal a second mortgage
• Funding rapidly rising college expenses for children
• Paying off other types of debt

According to the 2022 Urban Institute, approximately 38% of Millennials are not saving enough for retirement by age 70.

Despite these challenges, Millennials are increasingly open to professional financial guidance, especially when substantial inheritances are on the horizon.

Think about it; a future inheritance can influence:

• How aggressively you invest
• When you might retire
• Whether you prioritize paying off debt or increasing savings
• How you structure your financial safety nets

Brown|Miller utilizes goal-based planning to help Millennials strike a balance between today’s demands and their long-term investment strategies, without sacrificing financial flexibility.

“How can Millennials invest according to their values without forfeiting long-term returns?”

Millennials have been a significant force behind the rise of values-based investing. Instead of focusing solely on investment performance, they want their portfolios to reflect their beliefs and what matters most to them and their families.

This interest can show up in many forms, including:

• ESG and sustainable investment strategies
• Climate-focused or low-carbon portfolios
• Funds that support gender equity and diverse leadership
• Impact-driven mutual funds and community investment programs
• Tech-forward opportunities like crypto, fintech, and early-stage startups

However, building a portfolio around personal values requires thoughtful consideration. ESG scoring varies widely from one ratings agency to another, making it challenging to evaluate various investments objectively. Some value-driven strategies may impact risk or return expectations, especially when themes are narrow or concentrated within a select group of global companies.

Hype-led investments, such as cryptocurrency or speculative startups, can introduce significant volatility if not balanced with long-term planning and strategic considerations.

This is where structure becomes essential. Brown|Miller can help you document your values in a way that enables you to pursue your long-term financial goals. This includes evaluating whether ESG preferences complement a broader strategy, identifying where values align with strategy, while maintaining diversification across multiple asset classes and individual investments.

Values matter, and they can play a meaningful role in shaping your investment decisions. But discipline, consistency, and a clear long-term plan are what keep those values aligned with your financial future. It’s important to remember that:

• ESG scoring is inconsistent across multiple rating agencies
• Some strategies may negatively impact your return expectations
• Speculative investments, like crypto, may increase volatility

Brown|Miller helps Millennial investors like you integrate their values into portfolios thoughtfully, while maintaining long-term discipline and diversification to minimize risks of significant losses. Values definitely matter, but so do investment disciplines and patience.

“Which tax strategies can help Millennials build long-term wealth, especially if a substantial inheritance is expected in the next few years?”

Taxes influence nearly every part of a Millennial’s financial life, and understanding how different accounts and regulations work can shape long-term outcomes. Tax planning can help you keep more of what you earn, more of what you invest, and more of what you may eventually receive through an inheritance.

This begins with understanding when to use traditional versus Roth 401(k) contributions, monitoring IRA income limits, and recognizing how Roth IRA contribution rules evolve as your retirement date gets closer.

HSAs also deserve your attention, because they provide triple tax advantages that can serve as a powerful long-term savings tool.

It’s equally helpful to understand the annual gift tax exclusion, especially if family members are making financial transfers as part of a broader generational planning strategy.

And if you experience fluctuating income, such as career changes, sabbaticals, or entrepreneurial ventures, low-income years can present opportunities for tax-efficient Roth conversions.

Together, these strategies create a stronger framework for building and preserving wealth over time.

Receiving an inheritance may prompt you to consider how you’ll eventually pass on wealth to the next generation. That may include:

• Creating a will
• Naming beneficiaries
• Establishing trusts
• Considering lifetime gifts
• Assessing long-term tax exposure

Effective financial planning ensures that your deployment of future wealth aligns with your long-term goals and intentions.

“How can Millennials juggle rising expenses, family demands, and the pursuit of long term financial goals?”

Your financial reality may include student loans, the challenge of buying a home, childcare costs, evolving careers, funding the educational expenses of children, and, in many cases, helping aging parents, all while trying to save for retirement.

With numerous overlapping responsibilities, such as those between parents and children, it can be challenging to determine which priorities take precedence.

Building a realistic budget, maintaining an adequate emergency fund, and taking full advantage of employer benefits can help create a solid foundation. It’s also helpful to coordinate responsibilities across multiple generations and establish disciplines that simplify decision-making and reduce stress.

You need an experienced CFP® professional in Washington, D.C., who specializes in working with Millennials to make sense of these alternatives, while helping you develop a plan that supports your life today with a close eye on the future.

“How can Millennials optimize generational wealth when most families lose it by the third generation?”

Research consistently shows that generational wealth can be fragile; approximately 70% of it disappears by the second generation, and roughly 90% is gone by the third.

Here is a checklist you can use today to begin building a financial foundation that endures for generations:

1. Strengthen Your Personal Financial Foundation

• Pay down high-interest debt 
• Build a fully funded emergency reserve
• Maintain consistent retirement and investment contributions
• Protect income and assets with appropriate insurance coverage 

2. Build and Grow Long-Term Assets

• Invest regularly in tax-advantaged accounts
• Maintain diversified portfolios, not hype-driven or concentrated investments
• Buy and maintain real estate when appropriate
• Explore ownership of a business or other income-producing assets

3. Create Your Estate Plan

• Draft or update your will
• Establish powers of attorney and healthcare directives
• Review and update beneficiaries across all accounts
• Consider trusts if you have children or meaningful amounts of assets

4. Document and Organize Everything

• Keep a secure, updated list of financial accounts
• Store important documents in one accessible location
• Create simple written instructions for heirs
• Share passwords and digital access through a secure tool

5. Build Your Financial Team

• Partner with a fiduciary financial advisor
• Establish a relationship with a competent CPA
• Consult with an estate planning attorney
• Make sure all professionals communicate with each other regularly

6. Pass Down Ethical Standards, and Knowledge, Not Just Money

• Talk openly about finances with family members
• Teach children foundational money skills. Share your values about spending, saving, and giving.
• Explain the disciplines behind your long-term plans

7. Communicate Regularly

• Update loved ones on where documents are stored
• Review your plan annually and make necessary updates
• Hold periodic family discussions about expectations and goals
• Clarify your intentions to reduce family confusion later in life