As you begin to think about your estate plan, you’re pleased that you’ll be able to leave your children – and by extension your grandchildren – a considerable amount of money that can help ensure they’ll never have financial worries. However, you’ve heard enough stories about people blowing their inheritances that you want to do everything you can to make sure your heirs won’t be among them.
You don’t want to be among those people who leave their kids nothing because they feel like they’ve already given them every advantage. Maybe you’d rather not leave the assets in trusts and disbursed only in increments and with conditions attached.
Early financial literacy is key
If your kids are still young, give them some experience managing a small amount of money, saving and budgeting. Financial literacy can begin from the earliest age when a child gets their first allowance or birthday money from grandparents.
Even if your own parents thought it was “rude” to talk about money, talk about it with your children. One certified financial planner suggests giving young people a small investment account so they can learn how to make wise choices and be patient through the ups and downs of the market.
Passing on philanthropic interests and a team of advisors
It’s also important to get your kids involved in your philanthropic interests so they can see the value in sharing their good fortune to make a difference. Estate planning can help people pass on their values to the next generations – not just their money.
If you have a team of financial, tax, investment and legal advisors, get your kids involved in working with them when they’re old enough. If they have a team around them to advise them, they’re less likely to give in to college buddies asking for “seed money” to start a new business.
Do what’s right for your family
Of course, trusts may be your best option for ensuring that what you and those who came before you worked so hard for isn’t wasted. There are a multitude of trusts that can protect your kids’ inheritances from creditors, soon-to-be exes and more.
Every family is highly unique. With sound legal guidance, you can develop an estate plan that works for you and gives you peace of mind that what you leave behind will be used wisely.