Parents work their entire adult lives to provide for their kids and ensure their needs are met. If this work pays off in the form of substantial earnings and property, then you can have a considerable estate that can provide for your kids long after you are gone.
If you plan to leave them a sizable inheritance, though, there are precautions you should take in order to protect the money you leave behind. While you may not want to put too many restrictions and controls in place, there are some steps you can take to ensure you safeguard your wishes for your money and your children.
- Talk to your kids about your own financial goals and experiences. Children may not understand the work that goes into building a sizable estate, especially if that’s all they’ve known, as discussed in this article. Talk to them about the work it took to get to this point and what you hope will happen with the property and money you leave behind.
- Help them understand the value of money. Let them manage their own finances; have them get a job; encourage their philanthropic pursuits. All of these experiences can help them better grasp how to handle money responsibly.
- Consider staggering trust payouts. If you are concerned that your child will blow an inheritance, consider setting up a trust to pay out at different ages or after different milestones. Doing so can stretch their inheritance and give them motivation to accomplish certain things, like graduating college.
These are just a few ways that you can maintain some influence over how your children receive and spend the money you leave to them.
However, it is also important to understand that they are individuals who will make their own decisions. Placing too many restrictions or being too forceful with your own directions can turn a generous gift into a burden.
With all this in mind, it can be critical to talk to your estate planning attorney about your wishes and financial goals. With the benefit of a legal perspective, you can take steps to ensure your money and your heirs are protected without creating avoidable and frustrating complications.